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DSM supports the Dutch Corporate Governance Code (Tabaksblat Code), and applies all but one of the 113 Best Practices. The only exception is Best Practice III.5.11, which stipulates that the remuneration committee shall not be chaired by the chairman of the Supervisory Board. This exception has been discussed in the Annual General Meeting of shareholders, where it met no objections.
The following text describes DSM’s approach to the implementation of the Dutch corporate governance code. The text is part of the report by the Managing Board as included in the Annual Report 2005.
The general characteristics of DSM’s governance system are described in the section of the Annual Report 2005 entitled Corporate Governance, Risk Management and Internal Control (page 70). For 2005 a number of developments regarding Corporate Governance at DSM can be reported, although in this respect the year was not as eventful as the preceding one, in which the new Dutch Corporate Governance Code was published. Click here for the text on the Dutch corporate governance code included in the Annual Report 2004.
In April 2005, the Annual General Meeting of shareholders discussed the way DSM applies the Dutch Corporate Governance Code. With regard to the direct appointment of new Supervisory Board members and a new Managing Board member, the relevant regulations were complied with. Furthermore, a detailed remuneration policy for Supervisory Board and Managing Board members was submitted to the Annual General Meeting and approved. The proceedings of the Annual General Meeting were also made available online via the internet in 2005. The Vision 2005 Priority Foundation was dissolved because its goal, an orderly execution of the agreed Vision 2005 strategy, had been achieved.
Internal Control was strengthened in 2005 by a revision of the Corporate Requirements and a thorough and detailed implementation and compliance program via the so-called True Blue project. In this project, flying squads of process and internal control experts supported the business groups in introducing and implementing the revised Corporate Requirements.
In line with independence criteria the term of one of the DSM lead auditors within Ernst & Young came to an end; responsibilities have been transferred to a colleague who has not yet worked on the DSM account.
The first operational year of DSM Alert – our whistle-blowing procedure – yielded a limited number of cases (twelve). Some cases were directly solved by providing more information, some did not qualify and some led to corrective measures.
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