This report contains an overview of the activities of the Supervisory Board and its committees in 2018. A description of the composition and operation of the Supervisory Board is set out in this report and in the chapter on governance.
Profile and composition of the Supervisory Board
The Supervisory Board of LeasePlan has been composed to warrant proper execution of the function of the Board and its committees. Its size and composition are attuned to the nature and characteristics of the business as well as the required expertise and background of each member.
In 2018, the Supervisory Board consisted of Mr J.B.M. Streppel (Chairman), Mr S. van Schilfgaarde, Mr M. Dale, Mr S. Orlowski (until 21 March) and Mr E.J.B. Vink, Ms H. von Stiegel and Ms A.P.M. van der Veer – Vergeer (until 22 October). On 21 March 2018, Mrs. A. van Hövell-Patrizi was appointed to replace Mr. S Orlowski, who stepped down the same day.
All members of the Supervisory Board perform their duties independently and critically. In the event of a conflict of interest with regard to a particular topic, the Supervisory Board member in question may not participate in discussions or decision-making on that topic. Five members are independent (two of which were appointed following the specific right of recommendation by the Works Councils) and two are associated with the consortium of shareholders.
The members of the Supervisory Board have a diverse and balanced mix of knowledge, skills, and expertise, in line with the required profiles.
The Supervisory Board aims to ensure that its members represent a good balance in terms of diversity (including nationality, gender, and area of expertise) to warrant proper supervision of the overall management of the Group by the Managing Board.
Responsibilities of the Supervisory Board
The Supervisory Board supervises the policies of the Managing Board and the general conduct of affairs of LeasePlan and its Group companies.
In its role, it acts as an advisory partner to the Managing Board in determining the company’s strategic direction.
Regular topics for discussion and, where necessary, approval, are the annual and quarterly financial statements, operating and financial performance, organisation and people, strategy, funding, potential acquisitions and major investments, objectives, business plans, budgets, IT infrastructure, risk management, risk appetite, governance, internal controls, and any other organisational developments of the business.
The Chairman of the Supervisory Board is in close contact with the Chairman of the Managing Board. There are close relations with the Works Councils, not only safeguarded by the two Supervisory Board members who were appointed following the specific right of recommendation of the Works Councils, but also through direct and regular contacts from the Chairman of the Supervisory Board with the Works Councils. The Chairman of the Managing Board and the Company Secretary ensure that the members of the Supervisory Board receive timely and clear information on all relevant matters. LeasePlan’s internal Control functions have direct access to the Chairmen of the relevant committee or Supervisory Board, as applicable.
Certain resolutions of the Managing Board, specified in the Articles of Association of LeasePlan and in the Managing Board regulations, are subject to approval by the Supervisory Board. The Supervisory Board may discuss and, where necessary, approve certain decisions by way of written resolutions outside of the scheduled meetings.
Terms of appointment of members of the Supervisory Board
Members of the Supervisory Board are appointed for a maximum term of four years and may be reappointed following the expiry of the first term.
01. Assuring supervision quality
The members of the Supervisory Board take part in the Lifelong Learning (LLL) programme during the year. The Chairman of the Supervisory Board decides on the contents of the Supervisory Board’s LLL, with the aim of maintaining and, where necessary, improving the expertise of the Supervisory Board members at the standards that are generally imposed.
The learning programme covers relevant developments in the company and corporate governance as well as specific topics relating to the financial sector, integrity, risk management, financial reporting and audits.
Assessment of the Supervisory Board
The Supervisory Board carries out an annual assessment of its own performance, its composition and effectiveness, as well as the effectiveness of the LLL programme. Every three years, the self-assessment is performed with the assistance of independent supervision by a professional party selected by the Supervisory Board. In this triennial assessment, focus lies on the evaluation of the performance of individual Supervisory Board members, the culture within the Supervisory Board and the relationship between the Supervisory Board and the Managing Board. The Supervisory Board also performs an assessment of the Managing Board and its individual members, including its LLL programme. The Supervisory Board carried out its self-assessment on 20 March 2018.
The Supervisory Board is of the opinion that it meets the required profile in terms of suitability, expertise and diversity, and also complies with the Dutch Corporate Governance Code in this respect. The Supervisory Board Chairman prioritised bilateral contacts with the other Supervisory Board members to make sure everybody had the required information and knowledge, and there have been regular discussions with the Managing Board, the consortium of (indirect) shareholders and the Works Councils.
02. Supervisory activities
Meetings of the Supervisory Board and attendance
Since February 2018, the Supervisory Board held 12 meetings.
|6 February 2018||4 May 2018||11 September 2018|
|9 February 2018||20 July 2018||2 October 2018|
|20 March 2018||13 June 2018||12 November 2018|
|24 April 2018||3 August 2018||21 November 2018|
|Committee||Number of meetings|
|Remuneration and nomination committee||5|
|Selection and appointment committee||1|
|Steven Van Schilfgaarde||91.67%|
|Herta Von Stiegel||100%|
|Allegra Patrizi||100% as of appointment on 21 March 2018|
|Ada Van Der Veer||91.67% untill resignation on 22 October 2018|
|Stefan Orlowski||33% untill resignation on 21 March 2018|
Meetings held by the Supervisory Board in 2018
Senior management was frequently invited to make presentations on a range of topics to the Supervisory Board and its committees. Members of the Supervisory Board, the Managing Board and senior management also held relevant discussions throughout the year that were not part of the formally scheduled meetings and calls.
The combination of regular meetings / conference calls and the various informal consultations ensured that the Supervisory Board was well informed about the running of the business. The Supervisory Board additionally held several discussions among its members without members of the Managing Board being present.
03. Supervision: topics discussed
The recurring items on the quarterly agenda include the financial and commercial results, market developments, developments related to funding and liquidity (including quarterly approval of the funding framework), performance of the group companies, and risk management with a specific focus on the performance against the approved risk appetite, asset risk management, and credit risk management including approval of credit exposures above EUR 100 million.
Management of the company
The Supervisory Board is satisfied by the company’s overall performance, by the successful embedding of the ‘Power of One LeasePlan’ initiative in the year, and which has now largely been delivered. It is also satisfied by the progress made with the implementation of the Digital LeasePlan strategy, which began last year. Digital LeasePlan represents the next stage in the company’s transformation and will enable the business to deliver on its ‘any car, anytime, anywhere’ aspiration.
Financial reporting is discussed regularly at meetings and calls of the Supervisory Board. All interim financial statement reports and related review reports of the external auditor were discussed in the presence of the external auditor. Also the financial reporting control framework, any deficiencies and improvement actions were discussed. The Supervisory Board approved the financial statements for 2018 on 13 March 2019. KPMG acted as external auditor for the 2018 financial year. For each reappointment of the external auditor the Audit Committee will make a recommendation for the year under review in their March meeting, which will then be decided upon during the General Meeting of Shareholders.
The Legal Function, reporting directly to the CEO, has continued to evolve rapidly to keep pace with the changing needs of the business by becoming a strategic partner and business enabler. Legal is working to ensure its team members have the necessary skills to manage the transition from being the sole source of legal services to one in which they are managing an ecosystem of legal service providers. These services will be underpinned by innovative technology processes and solutions.
Recent developments in the global legal function include:
- The launch and ongoing development of several legal tech solutions, such as a global litigation tracking tool, new global online corporate housekeeping tool, e-signing capabilities, smart contracting and a global One Legal sharepoint communication platform
- New team dedicated to digital, technology and intellectual property providing focused support on all technology and intellectual property initiatives and supporting a digital customer journey across the LeasePlan group
- Cross jurisdictional (EU) harmonisation of contract terms for international product offering
- Appointment of a dedicated competition law expert acting as LeasePlan’s global competition lead, further enhancing LeasePlan’s competition compliance framework and awareness
- Updating various policies and charters, including the Legal Charter, the Dawn Raid Policy and the Global Signing Authority Policy
- Appointment of an employment law specialist supporting HR in its global and central initiatives and developments
- Supporting the ‘Power of One’ Legal 2.0; and ongoing dialogue across Group Legal and the local legal teams
As LeasePlan complies with the Banking Code, thorough attention is paid to discussions with the DNB and its requirements. The SREP letter and outcome are discussed, also by representatives of the Supervisory Board directly with DNB.
In 2018 the Risk Organisation continued its transition from a decentralised to a centralised organisation by implementing a new Risk Charter. Most notable changes included in the Risk Charter are in the risk governance (at Group level as well as at entity level), changes in the structure and set up of the risk committees, and the formal introduction of LeasePlan’s Risk Management Cycle and Risk Decision Framework. In addition, a new policy framework was developed and implemented. An integrated in control framework project was started to align and optimise the various control frameworks. The information security strategy was revised which also resulted in a new target operating model. And as part of its business as usual tasks the Risk Organisation concentrated on ensuring the company’s timely readiness for upcoming regulatory changes and contributed to many business and digital initiatives.
Privacy & compliance
The Privacy & Compliance function began working as a single global team in 2018 and its primary focus was on GDPR readiness. In addition, it addressed other key risk areas including fraud, money laundering/terrorist financing/sanctions and insurance compliance (IDD) and continued to strengthen its overall effectiveness. Measures taken included; implementing a new Anti-bribery and anti-corruption policy with new KPIs/KRIs and monitoring plan; conducting a Global Integrity Survey; updating a Compliance Risk Assessment; appointing a DPO to the Group Privacy Office and an anti-money laundering officer; and updating several policies and governance-related documents, including the Privacy & Compliance charter/framework, the Code of Conduct, the whistleblowing policy and multiple polices for privacy requirements.
04. Composition and reporting by committees
In order to enhance the efficiency of its work, the Supervisory Board has in Q4 of 2018 split the Remuneration and Nomination Committee into two, resulting in a total of four committees instead of three: the Audit Committee; the Risk Committee; the Nomination Committee and the Selection and Appointment Committee.
Each committee prepares the Supervisory Board’s decision-making in its designated area of interest. The Supervisory Board remains fully responsible, however, for the decisions prepared by these committees.
Each Supervisory Board member is entitled to attend the committee meetings, and receives the minutes of each committee meeting and, if so desired, all documentation. The Chairman of the Supervisory Board regularly attends the Audit Committee meetings as a guest.
The Audit Committee (AC) met nine times during the year. In addition to re-occurring items, such as the yearly assessment of internal audit function, the LeasePlan Group control measures, and the financials, the AC discussed the impact of the new (upcoming) legislation, such as IFRS 9, IFRS 15 and IFRS 16. The external auditor attended all meetings of the AC.
There were four Risk Committee meetings in 2018. A cycle of risk-related matters is addressed with a frequency of four times during the year (and more often if so desired), with specific items to be tabled upon request, such as IT security, resourcing and Pillar III.
Remuneration and Nomination Committee
The Remuneration and Nomination Committee was divided into two committees in 2018: Selection and Appointment Committee and the Remuneration Committee. The final Remuneration and Nomination Committee meeting took place in Q3 2018. The Remuneration Committee and the Selection and Appointment Committee had their first meetings in Q4 2018.
For more information on remuneration matters please refer to the Remuneration .
Annual report and financial statements for 2018
In accordance with the relevant provisions of the Articles of Association of LeasePlan, the Supervisory Board has reviewed the annual report and the financial statements for 2018.
The Supervisory Board discussed these documents with the Managing Board and KPMG, the external auditor, and took note of the external auditor’s report that it issued on the financial statements of 2018, as included as from page 90 of this report.
The Supervisory Board proposes that the shareholders adopt the financial statements and the proposed profit appropriation contained therein, and recommends the endorsement of the Managing Board’s conduct and the supervision thereof as provided by the members of the Supervisory Board.
The Supervisory Board
Jos Streppel (Chairman)
Steven van Schilfgaarde (Vice-Chairman)
Allegra van Hövell-Patrizi
Herta von Stiegel