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52
To the Shareholders
Committees
Preparatory Committee
Audit Committee
Heineken N.V.
Annual Report 2020
Introduction
Report of the
Executive Board
Report of the Financial
Supervisory Board Statements
Sustainability
Review
Other
Information
During the year, several representatives of senior
management and the Executive Team were invited
to give presentations to the Supervisory Board.
In 2020, the following subjects were presented in
more detail:
- The succession of the CEO, for which a thorough
succession process has been conducted.
- Impact of COVID-19 and measures, amongst others,
to ensure the health and safety of employees, support
suppliers, commitment to no structural layoffs until
the end of 2020 as a consequence of COVID-19, secure
financing, establish a crisis governance through a
Global Task Force installed to respond to COVID-19
and pro-actively take business measures and
mitigations (including cost reductions, suspending
all travel, a hiring freeze, suspending all non-
committed CAPEX, and implementing remuneration
related measures affecting the Executive Board as
further described in the Remuneration Report).
- Building the Executive Team including the
appointment of a Chief Digital Technology
Officer, and the succession and appointment of
the Chief Supply Chain Officer, Chief Corporate
Affairs and Transformation Officer, the Regional
President Asia Pacific, the Regional President
Europe, as well as successors for the Chief
Commerce Officer and Chief People Officer.
- Navigating the COVID-19 pandemic while
building a bright future including the state of the
business and the strategic response to the fast
changing world.
Regular Executive Sessions were held without the
Executive Board being present. The purpose of these
sessions was to evaluate the Supervisory Board
meetings and, where relevant, further reflect on
particular subjects discussed at the meetings.
One Executive Session was dedicated to the evaluation
of the Supervisory Board relating to the performance,
working methods, procedures and functioning of the
Supervisory Board, its committees and its individual
members as well as the functioning of the Executive
Board and its individual members. These evaluations
were conducted on the basis of individual interviews
of the Supervisory Board members with the
Chairman. The conversations covered topics such
as the composition and expertise of the Supervisory
Board, access to information, frequency and quality
of the meetings, leadership developments, quality and
timeliness of the meeting materials, and the nature of
the topics discussed during meetings. The responses
provided by the Supervisory Board members indicated
that the Board continues to be a well-functioning team.
The Supervisory Board has five Committees: the
Preparatory Committee, the Audit Committee,
the Selection Appointment Committee, the
Remuneration Committee and, since December
2020, the Sustainability Responsibility Committee
(instead of the Americas Committee). The terms of
reference for the Committees are available on the
Company's website.
Composition: Mr. Huët (Chairman), Mr. de Carvalho,
Mr. Das and Mr. Fernandez Carbajal. The Preparatory
Committee met seven times. The Committee prepares
decision-making by the Supervisory Board on matters
not already handled by any of the other Committees,
such as in relation to acquisitions and investments.
The Chairman of the Executive Board also attends the
Preparatory Committee meetings.
Composition: Mrs. Helmes (Chairperson), Mr. Huët,
Mr. Astaburuaga Sanjinés and Mrs. Arnold. The Audit
Committee met four times. The members collectively
have the experience and financial expertise to
supervise the Executive Board in its activities in
relation to the publication of financial statements and
operation of the internal risk management and control
systems, including the risk profile of the Company.
The Executive Board attended all meetings, and
so did the external auditor, the Executive Director
Global Audit, as well as the Senior Director Global
Accounting and Risk Management. The Senior
Director Global Finance Process and Services
attended three out of four meetings.
The Executive Director Global Audit has direct
access to the Audit Committee, primarily through its
Chairperson. During the year, the Audit Committee
met once with the external auditors and once
with the Executive Director Global Audit, in both
instances without management being present.
In addition, the Chairperson of the Audit Committee
and the Executive Director Global Audit held regular
update meetings during the year.
The Committee supervises the activities of the
Executive Board with respect to the publication of
financial information. The Committee reviews, in
the presence of the Executive Board and the external
auditor, the appropriateness of the half-year reporting
and the annual financial statements, focusing on:
- The decisions made on the selection and
application of accounting policies.
- The reliability and completeness of disclosures.
- Compliance with financial, non-financial and
other reporting requirements.
- Significant judgements, estimates and assumptions
used in preparing the reports in respect of,
among others, accounting for acquisitions and
divestments, the annual impairment test and
determining the level of provisions.
At the beginning of the year, the Committee reviews
and approves the audit plans of the external auditor
as well as Global Audit. The Committee focuses
mainly on the scoping, key risks, staffing and budget.
During the year, the Committee reviews the reports
of the external auditor and Global Audit.
The Chairperson of the Audit Committee held
regular update meetings with the CFO and other
senior executives to monitor the business impact of
COVID-19 and measures taken to mitigate its impact.
This included:
- Measures taken to avoid liquidity risks.
- Establishing crisis governance through a Global
Task Force installed to respond to COVID-19
and pro-actively take business measures and
mitigations (including suspending all travel, a
hiring freeze, suspending all non-committed
CAPEX, cancellation of STI and LTI and a 20%
voluntary base salary cut by the Executive Board
and the Executive Team),
- Reviewing financial results and financing needs.
- Responding to securing financing and getting
ready for post-COVID-19 developments
Furthermore, the Committee in 2020 discussed
recurring topics, such as:
- The effectiveness and the outcome of the internal
control and risk management systems, as well
as changes made and improvements planned to
these systems.
- (Functional) Updates in respect of Global
Procurement, Global Digital Technology, Global
Treasury Insurance and Global Tax, Pensions,
Business Conduct and Global Legal Affairs, as well
as Risk Management.
- Updates in respect of Global Digital Technology
regarding information security in the office
domain and the process control domain within
the brewery.
- HEINEKEN's governance, risk and compliance
(GRC) activities, including the HEINEKEN
Company Rules and the HEINEKEN Code of
Business Conduct.
