The Chairman of the Supervisory Board in the Netherlands

Board Practice

The chairman of the supervisory board in the Netherlands

How the profile has changed and the role is evolving The chairman of the supervisory board in the Netherlands

table of contents

Introduction 1

The changing profile of chairmen in Dutch listed companies 1990–2018 2 Introduction 2 Methodology 2 Trends 3 Conclusion 9

The changing role of the supervisory board chairman of Dutch listed companies: the next five years 10 Introduction 10 Methodology 10 Results 10 The “market” for supervisory board members 14 Conclusion 16 Chairmen of Dutch listed companies: compensation 17

Appendix 18

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Introduction

Shares, shareholders, and the monitoring of of the Tabaksblat Code (corporate governance management have a long history in the Nether- code), and growing pressure on, and higher lands. By issuing the world’s first tradable shares expectations of, supervisory boards. The 2008 in 1602, the Dutch Verenigde Oostindische Com- financial crisis resulted in increased regulation, pagnie introduced a new system to finance large affecting the environment in which companies, companies. This innovative system had some especially in the financial sector, operated. clear benefits from the start, but also suffered a variety of problems between the parties involved. This is the backdrop for our study on the chang- The pressure to solve these issues eventually re- ing profile and characteristics of the supervisory sulted in the establishment of supervisory boards board chairmen in listed Dutch companies to represent shareholders and other stakeholders since 1990. The chairman’s role has changed to look after the interests of the company from being primus inter pares to an important and central position in the Dutch corporate For a long time, these supervisory boards were governance system, which has benefited from quite large and recruited members from a lim- growing professionalisation. ited pool of people. Through the so-called ‘old boys network’, candidates for supervisory board In the first half of our report we analyse trends positions were often known to each other and in chairman profiles as they relate to age, approached informally. Over time, the system recruitment and retirement, tenure, executive gradually changed. Since the 1980s, the finan- background, nationality, educational back- cial system has grown rapidly and the position ground, and gender. of the shareholder has strengthened. During the following two decades, the globalisation In the second half of our report we consider of the economy, in particular financial markets, how the role of the chairmen will continue to proceeded at a rapid pace. develop over the coming years. As the role evolves so will the selection criteria, which in The increase in international shareholders, the turn will improve the suitability of potential arrival of large institutional investors, and the candidates, improving the quality of the entire growing activities of private equity, altered the corporate governance system. environment for companies and their supervisory boards. At the same time, corporate scandals Han van Halder and subsequent public scrutiny created pres- Herman Krommendam sure for more regulation. The Sarbanes-Oxley Spencer Stuart Amsterdam Act (2002) created a new and more demanding regulatory framework for companies active in Kees van Veen the US. In the Netherlands, the accounting Institute for Governance and Organizational scandal at Ahold led indirectly to the acceptance Responsibility, University of Groningen

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The changing profile of chairmen in Dutch listed companies 1990–2018

Introduction Chairmen Just as the chairman’s role has evolved since Data relates to the chairmen of the companies 1990, so too has the profile of those occupying in the period under review, and includes prede- the position. Our population consists of 245 cessors of organisations that these companies chairperson positions of supervisory boards, acquired or merged with. occupied by 184 individuals (chairmen are not restricted to one position; they may hold, or have held, more than one). We focused on Data before 1990 the following trends: age (average age, age Time-related data, such as the starting or retire- at appointment and age at the end of tenure), ment dates, was collected for the period prior tenure, former position, nationality, educational to 1990. To calculate duration data, such as background, and gender. tenure, the complete data range has been used, including for chairmen still in position. The data is thus “left censored”. Methodology Selection of companies Data sources Our starting point was the 49 AEX and AMX All data was collected by Spencer Stuart from companies on the Euronext Amsterdam, as at public sources. March 2018. Nine companies were eliminated from the AEX-AMX list because of the marginal Positions versus individuals nature of their operations in the Netherlands, Analysis focuses on the characteristics of the or are too recently listed. The nine were: individuals (184) occupying chairmanships Altice, AMG Group, Aperam, ArcelorMittal, (245). Depending on the characteristics under Gemalto, OCI, Takeaway.com, Unibail- review, we have selected the most appropriate Rodamco, and WDP. focus — positions or individuals.

To maintain our sample at 50 companies, we added a further 10 listed companies, based on revenue and number of employees: Accell Group, Brunel, HAL, Heijmans, Hunter Doug- las Group, Kendrion, Oranjewoud, Refresco Group, VolkerWessels, and Wessanen.

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TRENDS Tenure A rising recruitment age, coupled with the age Age at which chairmen leave the post rising more The average age of chairmen in 1990 was 61.5 slowly, makes it inevitable that the average years. By 2018 it had risen to of 66.5 years. length of tenure will fall. Tenure was fairly stable until 2007–2008, after which the average Several factors explain the trend. First, chair- declined from roughly 5.5 to 4.5 years. The de- men are staying longer in post. Second, the creasing tenure of supervisory board chairmen age at which chairmen are recruited has risen: indicates a readiness to conform to the Dutch in 1990, chairmen in our survey started their Corporate Governance Code, under which su- tenure at 57, on average, but by 2018 this had pervisory board members may hold two terms increased by four years to about 61.5 years. of four years, with a possible maximum four- year extension. Third, it is possible that the rising overall age reflects an increase in the age at which chairmen step down. However, this is only partly accurate. The rise in retirement age emerged Figure 2: Chairman tenure Average years only after 2000, when it was a little over 68, increasing to around 70 in 2012.1

Figure 1: Chairman age

Average years

— Average age — Age at appointment — Age at end of tenure1

1 The sudden but consistent drop after 2012 can be disregarded. It is an artefact of right-censored data which implies that chairmen are still in position, systematically reducing the average.

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Executive backgrounds offering an excellent grounding for future chairmanships. And indeed, Philips, Shell, Unilever, Turning to the professional backgrounds of the and ABN AMRO are the main “suppliers” to the 184 individuals in our study, 62 (34%) of them role (see figure 5. Excluded from this table are had previously served as an executive board five chairmen who had a background in politics). member or chief financial officer. However, the majority — 104 of the total group (57%) — had been chief executive officers prior to becoming chairman (see figure 3). Figure 5: Previous experience Most common organisations where chairmen spent We also looked more closely at the prevalence their executive careers of CEO experience in the 50 companies we reviewed (see figure 4). In the early 1990s, 45% of Company # Company # supervisory board chairmen had hands-on CEO Philips 13 SHV 5 experience, increasing to 67% in 2002–2003. Shell 12 DSM 4 The figure then declined gradually, stabilising Unilever 9 Aegon 3 at 45%. In the same period, we see that the per- ABN AMRO 8 Fortis 3 centage of former CEOs in the total population Various law firms 7 Heineken 3 has been shrinking. AkzoNobel 6 Rabobank 3 ING 5 VNU 3 We also examined where chairmen were most likely to have served at the executive level. Traditionally, the larger organisations are seen as

Figure 3: Former positions held by chairmen Figure 4: Percentage of chairmen with Background of chairman in absolute numbers CEO experience

CEO % Member executive board % CFO % Below executive board Law %

Politics % Academic % Not known Private Equity % %

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Nationality Figure 6: Chairman nationality The vast majority of the group we reviewed are Dutch vs. non-Dutch Dutch nationals (157 out of 184, or 85%). The rest are French (five), British (five), German (four), American (three), Belgian (two), and ▪ Chairmen with Dutch nationality (85%) Swedish (two). The remaining six are from a variety of countries or hold dual nationalities ▪ Chairmen with non- Dutch nationality (see figures 6 & 7). (15%)

The number of Dutch chairmen was stable at the near-100% level until around 2003, after which the number of non-Dutch chairmen quickly increased, culminating in 2007 at 25% (see figure 8). This coincided with the takeover Figure 7: Chairman nationality of ABN AMRO by a consortium of RBS, Fortis, Non-Dutch chairmen: country of origin and Banco Santander. Country # Country # This trend then went into reverse almost France 5 Belgium 2 immediately, with the proportion of Dutch UK 5 Sweden 2 chairmen in the 245 positions in the total group Germany 4 Other 6 climbing back up to around 85% by 2018. USA 3

Gender Figure 8: Chairman nationality 2 of 184 Chairmen of Dutch nationality, 1990–2018 Number of female chairmen since 1990 %

Even taking into account the lingering effects % of the recruitment policies of the 1980s, the percentage of women in the overall population % of chairmen is extremely low. The cohort of 184 counts just two women among its ranks, or % 1.1%. Although the number of women in supervisory boards is rising, this is not reflected in % chairmanships.

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Education Figure 10: Higher education Our research also looked at where the 184 in- By category dividual chairmen studied (see figures 10 & 11).

Of the Dutch universities, Erasmus University Education # Rotterdam accounts for the greatest number Dutch higher education 130 (70.7%) of chairmen (40), followed by Delft University Non-Dutch higher education 33 (17.9%) of Technology (22). The subgroup of chairmen No higher education 11 (6.0%) with no formal higher education is concentrat- NIVRA (or similar statutory 6 (3.3%) ed in the early part of the research period. accounting body) Higher vocational education level 4 (2.2%) Chairmen with a non-Dutch higher education (33) form another substantial group, partly reflecting foreign nationalities or qualifications such as MBAs undertaken overseas. Figure 11: Higher education Dutch universities from which chairmen graduated As far as areas of study are concerned, 65 (35% of the 184 under review) had a background in University # business administration/economics, followed Erasmus University Rotterdam 40 (30.8%) by 43 in engineering (22%) and 27 in law (14%), Delft University of Technology 22 (16.9%) see figure 9. University of Leiden 15 (11.5%) University of Amsterdam 15 (11.5%) Eindhoven University of Technology 9 (6.9%) Tilburg University 7 (5.4%) Vrije Universiteit 6 (4.6%) Figure 9: Educational background of chairmen University of Groningen 5 (3.8%) Courses taken by chairman in absolute numbers Nyenrode Business University 3 (2.3%) Utrecht University 3 (2.3%) Accounting Wageningen University and Research 3 (2.3%) Business Administration/Economics Radboud University 1 (0.8%) Engineering/Nautical University of Twente 1 (0.8%) Law Multiple Natural Sciences Social sciences No higher education

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Multiple chairmanships number of those in this category (37) is not insubstantial. 26 chairman during the period The vast majority — 147 of the 184 individ- held two chairmanships, and one chairman held uals we reviewed — have occupied a single a total of five positions over the review period. chairmanship, representing almost 80%. The Limits imposed by the Dutch Corporate Govern- number of individuals who have held two or ance Code, alongside the professionalisation of more positions, simultaneously or sequentially, the role, have also accelerated the decline. has declined in the review period. Even so, the

CONCLUSION

»»The average age of chairmen has »»The Erasmus University Rotterdam and increased by more than four years to Delft University of Technology produce an average of 66.5 years. the most chairmen. A substantial group of chairmen had a foreign education; »» More than half of the chairmen have CEO these were either non-Dutch nationals or experience (57%) or held other executive Dutch nationals who studied domestical- level positions (28%). However, these ly and then abroad. numbers are slowly declining. »»The largest group of chairmen had a busi- »» Philips, Shell, Unilever, and ABN AMRO ness administration/economics educa- have been important training grounds for tional background. chairmen of supervisory boards. »» 80% of the group held only one chair- »»The vast majority of chairmen are Dutch manship. The remaining 20% held two or nationals. Levels of other nationalities more, simultaneously or sequentially, in rose quickly after 2003, but the trend the period between 1990–2018. reversed around 2008.

»»The percentage of women holding chairmanships is extremely low.

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The changing role of the supervisory board chairman of Dutch listed companies: the next five years

Introduction Results The growing imperatives of corporate govern- Time commitment and importance of ance have increased the importance of the the chairman role supervisory board chairman in Dutch listed companies. Consequently, the profiles of those On average, participating chairmen commit an appointed to — and considered for — chair- estimated 63 days per year. They predict that manships have changed. How this role evolves total time will increase by a substantial 22%, to will define the quality of corporate governance an average of 77 days. and govern the selection criteria for candidates. All but one chairmen believe the importance of It makes sense then to explore what the role the position will grow over the next five years of the chairman might look like in the next five (see below). This rising influence will acceler- years — and what kind of candidate might ate the number of days that the role demands. occupy it. More than 75% of the chairmen also partly or fully agree that cooperation between the CEO and the chairmen will intensify. A few chair- Methodology men, noting that this process is already under We invited 30 chairmen of Dutch listed companies to contribute to our research into how Figure 12: The chairman’s role their role might evolve over the next five years. How chairmen view the importance of their role over Twenty-one of these chairmen agreed to partic- the next five years ipate (see Appendix). We asked them to complete a semi-structured questionnaire and invited their personal reflections. We interviewed five of the 21 individually, to provide a deep dive

into how they saw the chairman’s role changing. We focused here on six areas: (i) time commitment to and importance of the role, (ii) responsibilities, (iii) internal board processes, (iv) relations with external parties, ( v) recruit- Substantially Slightly Stay the Slightly Substantially ment and on-boarding, and (vi) compensation. reduce reduce same increase increase

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way, suggest that differences in responsibility Changing responsibilities between chairman and CEO should be clear- A vast majority of respondents believe that in- ly demarcated. Chairmen should also guard volvement in strategy development will contin- against other supervisory board members feel- ue to increase the next five years (see figure 14). ing sidelined by closer CEO-chairman relations. However, their comments also suggest that this change is part of an existing long-term trend. Only a handful of companies in the Netherlands have a single-tier board and each of these is dual-listed. Since the option became available Figure 14: Strategy to all companies, only very few have chosen The supervisory board will be increasingly involved in to adopt a single-tier board and none in our strategy development over the next five years company sample. However, two-tier boards are moving informally in the direction of “one-and- a-half-“ tier boards. As chairmen strengthen their position within internal corporate governance systems, our respondents expect this trend towards unitary boards will continue.

Chairmen were asked whether they expected to spend additional time on 11 areas of responsbil- Fully Partly Neutral Partly Fully disagree disagree agree agree ity. As a group, they anticipate spending more time on all 11. Figure 13 ranks these areas in order of predicted demands on their time. In the wake of the Dutch Corporate Governance Code 2016, effective 1 January 2018, which recommends that supervisory boards should work Figure 13: Demands on chairmen’s time with management to create the desired culture, Areas/activities that chairman believe will take more the chairmen were also asked if they think that of their time over the next five years (by rank) the importance of long-term planning in stra- tegic decision-making will change. Almost half 1. ICT/digital of the respondents think it will remain stable 2. Strategy development and advice (47.6%); others see a slight increase (28.6%) or 3. Executive and non-executive recruitment a strong increase (23.8%). 4. Contacts with shareholders 5. Executive compensation Individual comments give a more nuanced 6. Risk management picture. Two specifically mention the Dutch 7. CSR/reputation management Corporate Governance Code as a driving force. 8. Supervisory board group dynamics However, some see long-term orientation 9. Contacts with other stakeholders as integral to strategy, whereas others view 10. Compliance issues predictions of increased attention as 11. Financial reporting and control/finance somewhat exaggerated.

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We also asked the participating chairmen to Chairmen’s comments suggest that increased consider this statement: “In the next five years, contact with this tier of executives has been the chairman of the supervisory board has to under way for some time. It deepens a chair- deepen his knowledge of the non-financial per- man’s understanding of what is going on in the formance of the company (such as greenhouse company and is valuable in terms of succession gas emissions, employee satisfaction, and planning. Respondents emphasise that such sustainability issues).” Only a few chairman contact should be coordinated carefully with disagree entirely. Individual comments show the CEO. that the importance of these topics is growing, under pressure from sources ranging from The growing importance of separate commit- governments, NGOs, the media and society to tees within a supervisory board will change “green investors” and the governance depart- board dynamics. Most of the respondents ments of institutional investors. (12) do not predict that this will increase the complexity of the chairman’s task; five see it as Finally, we asked the chairmen if they expect slightly reducing complexity, and four as only legal and other compliance responsibilities to slightly complicated. It was noted that the com- occupy more of their attention. Although they mittee system is effective, but that the chair- do not anticipate committing more time to man needs to guard against the development these areas, they do not expect to relax their of sub groups. attention, given the robust nature of compliance demands. Thirteen of the 21 respondents A slight majority predicts that the size of super- (almost 62 %) partly or completely agree, only visory boards will remain stable. Respondents one completely disagrees, and the others agreed that the ideal supervisory board size is are neutral. six to eight individuals. A far larger majority — with only one chairman disagreeing — believes Internal board processes that the chairman will continue to determine board dynamics. Chairmen are responsible for the internal processes and dynamics within the supervisory board; they are also the supervisory board’s main point of contact with key players inside and outside the company. We asked participating chairmen if they envisioned strengthening contacts with management tiers below the executive board. Seventeen of the 21 respondents expect to do so, to a greater or lesser extent. The remainder foresee no change in levels of contact.

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Recruitment of supervisory board Figure 15: Can the chairman influence corporate culture? members External views (in the eyes of chairmen) The prevailing outlook for recruiting new members to the supervisory board is an issue that worries many chairmen. Ten (almost 48%) fully

agree and seven slightly agree that recruitment will become “increasingly difficult over the next five years”. No one disagreed; four (19%) were neutral (see figure 16). Chairmen noted that the quality of characteris- Fully Partly Neutral Partly Fully tics that supervisory boards seek in a candidate under- under- over- over- estimates estimates estimates estimates is rising. And as supervisory board size is not expected to grow, there is an increasing need for “five-legged sheep” — exceptional people Corporate culture who bring multiple skills and experiences to the supervisory board. One respondent laments The 2018 Corporate Governance Code pays how hard it is to find “modern seniors and close attention to the responsibilities of the experienced juniors”. supervisory board with regard to the role of culture in a company. We asked our respond- Other factors raised by our group of chairmen ents about how the external world views the include diversity requirements, external pres- influence that supervisory board chairman sure (from institutional investors, government have on organisational culture. Opinions vary, etc.), relatively low remuneration in relation to but the majority (15, or 71.4%) thinks people overestimate their influence (see figure 15). Some chairmen suggest that cultural change is an executive responsibility, not that of the Figure 16: Recruiting supervisory board supervisory board. members Hiring suitable members will become increasingly difficult over the next five years External relations We also asked participating supervisory board chairmen if they believed that in the next five

years the wishes of the shareholders will occupy more of their attention. Fourteen slightly agreed (66.7%), and five completely agreed (23.8%). Only two were neutral. The CEO is the main link to shareholders, but it was noted that increas- Fully Partly Neutral Partly Fully ingly they seek direct contact with the chairman. disagree disagree agree agree

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The “market” for a growing time commitment, and competition supervisory board for specific expertise (such as ICT/digital). Also members coming into play are corporate governance demands that limit board tenure to eight years The chairmen who took part in our forum and restrict the number of supervisory board highlighted an evident tightening in the positions that any one person can hold (see the “market” for supervisory board members. Wet Bestuur en Toezicht). Board professionalisation boosts the demands of the work and the time needed to do it. The We also asked the chairmen to identify the key number of qualified individuals willing to take elements of a solid induction period for their on a large number of supervisory board successors. They unanimously favour intensive, memberships is small and declining. This meticulously planned onboarding programmes. shrinks the pool of suitable candidates. A recurring suggestion is that new chairmen should not take over the position immediately However, an opposing trend exists: the drive upon appointment; rather, an incoming chair- for greater board diversity and the need for new man should join the supervisory board for a expertise will broaden the domestic and year before assuming control. international candidate base. This fresh layer comes into play as supervisory board members quit after the mandatory eight years — Compensation levels assuming they do not seek fresh supervisory The compensation levels of top executives have board positions elsewhere — or when age long been subject to intense scrutiny. Levels for limitations come into force. supervisory board members have received far The Spencer Stuart Board Practice has observed less attention. Whereas the supervisory board a growing structural shortage of candidates with can determine the CEO’s compensation, no experience in large Dutch listed companies. In one can determine the compensation of the the past 25 years, there has been an exodus of supervisory board — and what is a reasonable Dutch large- and medium-sized companies level — except the supervisory board itself. from the AEX-AMX indices. More than 50 larger companies that would have served as solid To complicate matters further, no clear stand- training grounds have left the stock exchange; ards exist to clarify what constitutes “reasona- only circa 20 large- or medium-sized companies ble” compensation (except for the semi-public have entered due to an IPO or autonomous sector, where it is defined in theWet Normering growth (see Appendix). Topinkomens).

This contraction in training grounds diminishes We asked our panel for their perceptions of the the pool from which search firms can recruit. current compensation level among the general This is especially problematic for the position population of chairmen. Most (15, or 71.4%) of the chairman of the supervisory board — for think it is low or much too low. However, five a healthily functioning supervisory board, it is believe it is the right level (23.8%), and one vital that the chairman brings experience in at thinks it is far too high (see figure 17). least an equivalent executive position.

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Some respondents remarked on the higher The group of chairmen was also asked to sug- compensation of chairmen in some European gest compensation criteria. Most of them advo- countries (Switzerland, UK, France and Bel- cated company-related characteristics, similar gium, for example), and that in the financial to job evaluation criteria used to compensate services and “semi-public” sectors, the com- CEOs: company size and complexity, technol- pensation does not reflect the risks involved. ogy, risk and damage potential, responsibility, and time commitment. Two of the chairmen The Dutch Corporate Governance Code currently proposed that compensation should be linked recommends not awarding shares or options to that of the CEO. One suggestion was to view to supervisory board members. We asked our compensation as a supply-demand process, participating supervisory board chairmen if they perhaps taking the expertise of the candidate thought it should be possible to receive com- into account. Another chairman suggested pensation in this way. The response was mixed. basing fees on the hourly rates of boardroom Twelve of the 20 respondents agreed they would consultants (“same level of oversight and partly or fully welcome this possibility. However, advice role”). One chairman suggested taking eight disagree or are neutral (see figure 18). the European median of similar companies as a benchmark (“just below the median”, to be One chairman believes that the UK system precise), while another recommended bench- in which chairmen are required to buy shares marking only within the Netherlands rather would not be a good fit with Dutch culture, than looking at other countries. In this scenario, warning that supervisory boards should not non-Dutch candidates could receive a higher become obsessed with share prices. compensation level based on the country from which they come.

Figure 17: Chairman compensation Figure 18: Paying chairmen in shares/ How chairmen view the current level of compensation options for supervisory board chairmen Chairmen express their views on whether this should be possible

Much Too low At the Too high Much too low right level too high Completely Partly Neutral Partly Completely disagree disagree agree agree

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Conclusion

»»The chairman’s role will demand a greater »» Recruitment will be an important part of time commitment. It is expected to grow the chairman’s agenda. from 63 days to 77 days, which is 22% »»The induction period of a new chairman is more than it is now. taken very seriously and needs meticulous »»The relation between the chairmen and planning; a one-year supervisory board the CEO will further intensify. membership is favoured before taking over the position of the chair. »»The topics that will increase most in terms of time commitment are (a) ICT/digital, »» Compensation of the chairman remains a (b) strategy development and advice, and complicated issue. Present compensation (c) recruitment of (non-) executives. levels are overall seen as being on the low side. »» Chairmen will need to pay more attention to non-financial performance measures »»There is substantial interest in compen- (such as GHG emissions, employee satis- sating chairmen with shares/options. faction, and sustainability issues). »»The suggested criteria on which to base »» Compliance will continue to require atten- compensation levels match CEO job eval- tion, but will not occupy much more of uation criteria, such as company size, the chairman’s time. complexity, reputational risk (etc). It is also suggested that compensation should »» Contacts with the management tiers be linked to that of the CEO. below the executive board will require more attention.

»»The wishes of the shareholder will require more and more attention of the chairman.

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chairmen of dutch listed companies: compensation

Research by the Spencer Stuart Board Practice shows €600,000 to €850,000. One of the companies that the base compensation for supervisory board (AirFrance-KLM) has a combined chairman/CEO chairmen at the 46 AEX and AMX companies with a role and is not included. two-tier board regime varies between €38,000 and Compensation of supervisory board members at the €220,000 (with an average of €80,000). remaining 46 two-tier companies varies from €30,000 There is substantial divergence between these to €90,000; the average is €52,000. A supervisory companies, depending on size (revenue/employees), board chairman in the two-tier population earns complexity and international remit. Compensation around 1.54 times the base compensation of a for the supervisory board chairman of the four supervisory board member, about 13.4% of the companies with a single-tier board varies from base compensation of a CEO.

Remuneration of supervisory boards of Dutch AEX-AMX companies in 2017

Chairman compensation (€) Board member compensation (€) Average Average Lowest Highest Average Average Lowest Highest # total base base base total base base base Companies with 46 94,000 80,000 38,000 220,000 67,000 52,000 30,000 90,000 two-tier boards Companies with 4 763,0001 722,000 600,000 850,000 112,000 89,000 40,000 135,000 one-tier boards

Relative remuneration of supervisory board chairmen, board members and the CEO

Chairman vs non-executive Chairman vs director compensation (%) CEO compensation (%) # Base Total Base Companies with 46 154% 140% 11.4% two-tier boards Companies with 4 811% 681% 55% one-tier boards

The four companies with a single-tier board are: AirFrance-KLM, RELX Group, Shell, and Unilever. Source: Netherlands Board Index 2018

1 Excluding AirFrance-KLM which has combined chairman/CEO role

Spencer Stuart Page 17 The chairman of the supervisory board in the Netherlands

Appendix

Companies that have disappeared from the AEX-AMX due to mergers and acquisitions or bankruptcy over the period researched ABN Bank / Amro Endemol Mediq TenCate Bank Fokker NBM-Amstelland / TNT Express / TPG Ahrend Fortis NL (Amev / AM Unit4 Baan Stad Rotterdam) (P&O) Nedlloyd Univar Begemann Frans Maas Numico (Nutricia) USG People Borsumij Wehry Gamma Holding Nutreco Van der Moolen Buhrmann / KNP-BT Getronics Océ Van Leer Packaging / KNP Geveke PinkRoccade Van Ommeren Ceteco Cap Volmac/Cap Gist-Brocades Polygram Gemini Vedior Grolsch Refresco CMG / Logica CMG Vendex KBB / KBB Hagemeyer Robeco Corio Versatel HBG Schuitema Crucell VNU Hoogovens / Corus Smit Internationale DAF Wavin Imtech SNS Reaal Delta Lloyd Wegener KLM Stork Douwe Egberts MB Ziggo Landis Super de Boer Draka Libertel Vodafone (Laurus)

Companies that entered the AEX/AMX due to an IPO or substantial growth Aalberts Industries Brunel Heijmans Sligro Arcadis DSM IMCD Takeaway.com ASM International Euronext KPN TomTom ASML Fugro PostNL Besi GrandVision Signify (Philips Lighting)

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Acknowledgements

Participants We would like to thank following chairmen for sharing their insights and opinion with us:

Frans Cremers Ben Noteboom Ron Teerlink Floris Deckers Harrie Noy Rijnhard van Tets Kees van der Graaf Adriaan Nühn Jeroen van der Veer Rob ter Haar Martin van Pernis Hélène Vletter Niek Hoek Arthur van der Poel -van Dort Henk ten Hove Rob Routs Sjoerd Vollebregt Jan Holsboer Duco Sickinghe Mathieu Vrijsen Jan Hommen Dick Sluimers Peter Wakkie Gerard Kleisterlee Tom de Swaan

The following people contributed significantly to the research process: We thank Martine Gouw at Spencer Stuart for her assistance during the data collection and Peter van der Meer, Reggy Hooghiemstra, and Dennis Veltrop at the RUG for their contribution in the statistical analyses and other academic input.

Spencer Stuart Page 19 Amsterdam Atlanta Bangalore Barcelona Beijing Bogotá Boston Brussels Buenos Aires Calgary Chicago Copenhagen Dallas Dubai Düsseldorf Frankfurt Geneva Hong Kong Houston Istanbul Johannesburg Lima London Los Angeles Madrid Melbourne Mexico City Miami Milan About Spencer Stuart Minneapolis/St. Paul Montreal At Spencer Stuart, we know how much leadership matters. We are trusted by organizations Moscow around the world to help them make the senior-level leadership decisions that have a lasting Mumbai impact on their enterprises. Through our executive search, board and leadership advisory Munich services, we help build and enhance high-performing teams for select clients ranging from New Delhi major multinationals to emerging companies to nonprofit institutions. New York Orange County Privately held since 1956, we focus on delivering knowledge, insight and results through the Paris collaborative efforts of a team of experts — now spanning 57 offices, 30 countries and more Philadelphia than 50 practice specialties. Boards and leaders consistently turn to Spencer Stuart to help Prague address their evolving leadership needs in areas such as senior-level executive search, board Rome San Francisco recruitment, board effectiveness, succession planning, in-depth senior management Santiago assessment and many other facets of organizational effectiveness. São Paulo For more information on Spencer Stuart, please visit www.spencerstuart.com. Seattle Shanghai Silicon Valley Singapore Stamford Stockholm Social Media @ Spencer Stuart Sydney Stay up to date on the trends and topics that Tokyo are relevant to your business and career. Toronto Vienna

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