NV Nederlandse Spoorwegen is a public limited company under Dutch law. Its registered offices are in Utrecht. NV Nederlandse Spoorwegen is the holding company of NS Groep NV.
The governance of NS, which is a State participation, is based on the modified two-tier company regime. NS has a two-tier management structure. NS Groep NV is managed by the Executive Board, which consists of the same people as the Executive Board of NV Nederlandse Spoorwegen. The Executive Board renders account for the execution of its tasks to both the Annual General Meeting and the Supervisory Board. The Executive Board is supervised by the Supervisory Board. Both the Executive Board and the Supervisory Board render account for the execution of their tasks to the Annual General Meeting of Shareholders.
The sole shareholder of NV Nederlandse Spoorwegen is the Dutch State. The role of the shareholder is performed by the Ministry of Finance. The General Meeting is held annually, within six months of the close of the financial year.
The matters discussed at the General Meeting include the annual report by the Executive Board. The General Meeting also adopts the financial statements, approves the profit appropriation, discharges the members of the Executive Board from liability for their policy work, discharges the members of the Supervisory Board from liability for their supervision and instructs the auditor to audit the financial statements. Other general meetings can be held as often as is desired by the Executive Board, the Supervisory Board and the shareholder. Resolutions can also be adopted outside meetings.
Corporate Governance Code
As a large corporation with an important public role of great significance in Dutch society, and with the Dutch State as our sole shareholder, NS is keen to stress the importance of openness and transparency. Although not a listed company, NS applies the Dutch Corporate Governance Code 2016 (hereinafter the 'Code'). Given that NS is not a listed company and does not have a one-tier management structure, several elements of the Code do not apply to it. On its website, NS provides an overview of all the provisions in the Code plus explanatory notes on how NS applies those provisions.
The Executive Board is charged with and responsible for managing the company. It reports to the Supervisory Board and the General Meeting. The Executive Board develops the vision and associated mission, strategy and objectives. The Executive Board is responsible for implementing the NS strategy. Implementation is partly handled by the business units and subsidiaries, with the executive directors of the business units and subsidiaries also bearing responsibility for this. Pursuant to the Articles of Association of NV Nederlandse Spoorwegen, the Executive Board Rules of Procedure and the Supervisory Board Rules of Procedure, certain decisions by the Executive Board are subject to approval by the Supervisory Board and/or the General Meeting. The Executive Board is responsible for managing the business in a transparent way.
Executive Board members are appointed in the General Meeting on the recommendation of the Supervisory Board. The Supervisory Board decides on the number of members for the Executive Board. Members of the Executive Board can be suspended or dismissed by the General Meeting. Members of the Executive Board are appointed or reappointed for a period of four years at most. The Executive Board aims for a composition that is diverse, with a good mix in terms of gender and age. The Executive Board saw several changes in its composition in 2019. Ms Susi (S.M.) Zijderveld stepped down on 1 May 2019. Ms Anneke (A.M.E.) de Vries was appointed member of the Executive Board with responsibility for Stations and Risk effective 15 October 2019. The Executive Board currently consists of the following individuals: Mr Roger (R.M.L.H.) van Boxtel, Chair and CEO, Mr Bert (H.L.L.) Groenewegen, Member of the Board - Finance and Abellio, Ms Anneke (A.M.E.) de Vries, Member of the Board - Stations and Risk, Ms Marjan (M.E.F.) Rintel, Member of the Board - Operations, and Mr Tjalling (T.B.) Smit, Member of the Board - Commerce & Development.
The remuneration and terms and conditions of employment of the Executive Board members are established by the Supervisory Board with due regard for the remuneration policy adopted by the General Meeting. The remuneration policy for members of the Executive Board, to which reference is made in their respective employment contracts, includes the right to compensation upon dismissal on the initiative of NS, up to a maximum that has been fixed at one year’s basic salary. Both the Executive Board as a whole and each individual Executive Board member are authorised to represent the company. The Executive Board’s responsibilities, tasks and procedures are laid down in the Articles of Association of NV Nederlandse Spoorwegen and NS Groep NV, and in the Rules of Procedure of the Executive Board.
The Executive Board aims to achieve the objectives and ensure the continuity of the company and its affiliated enterprises. Based on the NS strategy, the Executive Board focuses on long-term value creation while weighing up the relevant interests of the stakeholders. That means that when making decisions, the Executive Board takes aspects such as safety and the role of NS in providing sustainable mobility into account, in addition to financial aspects. In cases where a (potential) direct or indirect personal interest of a member of the Executive Board conflicts with the interests of NS, that member will immediately inform the chair of the Supervisory Board and the other members of the Executive Board of such potential conflict. The member will disclose all relevant information, including information about any spouse, registered partner or other companion, foster child and relatives by blood or affinity to the second degree of consanguinity. Members of the Executive Board will not be involved in discussions or decision-making concerning a matter or transaction where their direct or indirect personal interests conflict with the interests of NS. If all members of the Executive Board have a direct or indirect personal interest that conflicts with the interests of NS and, as a result, the Executive Board is unable to make a decision, the decision will be made by the Supervisory Board. The Supervisory Board must give its approval beforehand to decisions by the Executive Board about such matters as entering into transactions which involve conflicting interests that are of material significance to NS and/or the Executive Board member in question. Such transactions are published in the report by the Executive Board, stating the conflicting interest. There were no such transactions in 2019. Transactions involving conflicts of interests of members of the Executive Board or Supervisory Board are agreed with conditions that are in line with the market.
The Company Secretary ensures that the proper procedures are followed and that the actions taken comply with the legal and regulatory obligations applicable to the Executive Board. This procedure was adhered to in 2019.
The Supervisory Board
The Supervisory Board’s tasks include supervising the Executive Board’s policies and the general affairs of the company and its affiliated enterprises. It also advises the Executive Board. In performing its duties, the Supervisory Board focuses on long-term value creation for the company and its affiliated enterprises, taking into consideration the interests of the company's stakeholders. The Executive Board provides the Supervisory Board promptly with the information and resources the latter requires in order to do its work properly. If the Supervisory Board and/or a member of the Supervisory Board consider it necessary, they can obtain information from the Executive Board, NS Audit, the external auditor, the Central Works Council and/or other officials and external advisers to NS.
The Supervisory Board saw several changes in its composition in 2019. On 1 July 2019, Mr Paul (P.) Rosenmöller (vice-chair) stepped down upon termination of his term of office. Effective 1 June 2019, Ms Nebahat (N.) Albayrak took up her duties as a member of the Supervisory Board. In 2019, the Supervisory Board consisted of the following individuals: Mr Gerard (G.J.A.) van de Aast (chair), Mr Jeroen (J.J.M.) Kremers (stepped down on 26 January 2020), Ms Marike (M.) van Lier Lels (vice-chair), Ms Janet (J.L.) Stuijt, Mr Pim (W.J.) van der Feltz, Ms Nebahat (N.) Albayrak (from 1 June 2019) and Mr Paul (P.) Rosenmöller (until 1 July 2019). On 1 January 2020. Mr Herman (H.) Dijkhuizen was appointed member of the Supervisory Board of NS and chair of the Risk and Audit Committee. He filled the vacancy that had arisen after Mr Kremers stepped down on 26 January 2020 after having served as member of the Supervisory Board for two full terms.
The Supervisory Board's responsibilities, tasks and procedures are laid down in the Articles of Association of NS, the Articles of Association of NS Groep NV and the Rules of Procedure of the Executive Board, the Supervisory Board and its committees. The Supervisory Board as a whole is responsible for the proper implementation of its tasks. Supervisory Board members are free to adopt positions independently from the Executive Board. Members of the Supervisory Board perform their duties without a mandate and independently of any personal interest in the company. At least once a year, the Supervisory Board discusses the performance of the Executive Board as a body and the performance of the individual members of that board.
Supervisory Board members are appointed by the General Meeting, on the recommendation of the Supervisory Board, with due observance of the job profile and after consulting the Central Works Council. The Central Works Council has enhanced powers of recommendation covering the nomination of one third of the Supervisory Board members. The Supervisory Board has at least five members and at most nine. The Supervisory Board has drawn up a profile for its size and composition, taking account of the nature and activities of the company and the desired expertise and backgrounds of its members. The Supervisory Board aims for a composition that is diverse, with a good mix in terms of gender and age. The profile will be adapted as soon as that is required for it to accurately reflect current conditions. All of the Supervisory Board members are independent within the meaning of the Code.
Supervisory Board members can be appointed for two terms of four years each. After that period, they can be reappointed for a maximum of two terms of two years each. Reappointment after a period of eight years must be justified by the Supervisory Board in its report. In the case of a reappointment, the manner in which the relevant board member fulfilled their duties in the previous term is taken into account, and they will only be reappointed after careful consideration. The Supervisory Board’s retirement schedule is published on the company's website.
Supervisory Board members must report any potential conflicts of interests relating to NS to the chair of the Supervisory Board without delay. If the conflict concerns the chair, he or she must report this without delay to the vice-chair. The member in question must disclose all relevant information, including the information relevant for the situation about their spouse, registered partner or other companion, foster child or relatives by blood or marriage to the second degree of consanguinity. Members of the Supervisory Board will not participate in discussions and decision-making about any matter or transaction where their direct or indirect personal interests conflict with the interests of NS.
Committees of the Supervisory Board
In view of the extent, diversity and complexity of the matters it has to handle, the Supervisory Board has set up a Risk and Audit Committee and a combined Remuneration and Appointments Committee. The composition of these committees is determined by the Supervisory Board. The committees advise the Supervisory Board and prepare its decisions. This allows the committees to assist effective decision-making by the Supervisory Board. The Supervisory Board as a whole remains responsible for the decisions that have been prepared by a committee.
Risk and Audit Committee
The Risk and Audit Committee (RAC) performs its duties in accordance with the Rules of Procedure as established by the Supervisory Board in accordance with the provisions of the Code. All Supervisory Board members are also members of the Risk and Audit Committee, and are independent within the meaning of the Code. The Risk and Audit Committee advises the Supervisory Board and prepares the Supervisory Board's decisions with respect to monitoring the integrity and quality of NS’s financial reporting and the (assessment of the) effectiveness of NS’s internal risk management and control systems. The Risk and Audit Committee convenes at least twice a year or as often as it deems necessary, and at least once a year with the external auditor without the Executive Board being present. The Rules of Procedure stipulate that the RAC must have at least three members.
Remunerations and Appointments Committee
The combined Remuneration and Appointments Committee performs its duties in accordance with the Rules of Procedure as established by the Supervisory Board under the provisions of the Code. The Remunerations and Appointments Committee consists of four members, all of whom are independent within the meaning of the Code. The Remunerations and Appointments Committee currently consists of the following members: Ms Janet (J.L.) Stuijt (chair), Ms Nebahat (N.) Albayrak, Mr Gerard (G.J.A.) van de Aast and Mr Pim (W.J) van der Feltz. The Remunerations and Appointments Committee prepares the decisions of the Supervisory Board in areas such as the appointment of Executive Board and Supervisory Board members, the performance of the Executive Board and the Supervisory Board, and the formulation and implementation of the remuneration policy for the Executive Board.
The Remunerations and Appointments Committee draws up an annual remuneration report about (the implementation of) the remuneration policy for the members of the Executive Board. The Supervisory Board determines the remuneration for individual Executive Board members based on the proposals from the Remunerations and Appointments Committee and within the limits of the remuneration policy adopted by the General Meeting. The remuneration report can be found in the present report.
The Remunerations and Appointments Committee sets the selection criteria and procedures for appointing Supervisory Board and Executive Board members, as well as periodically reviewing the size and composition of the Supervisory Board and proposing a profile for its make-up. It is also responsible for the process for periodic appraisal of the performance of the individual Supervisory Board members, and presents proposals for their appointment or reappointment.
The external auditor is appointed by the General Meeting. The external auditor reports to the Supervisory Board and Executive Board on its audit. After the examinations and audit, the auditor issues an audit opinion regarding the truth and fairness of the NS financial statements.
The Risk and Audit Committee annually reports to the Supervisory Board on the performance of and developments in the relationship with the external auditor. The external auditor attends the meetings of the Supervisory Board in which its report on the audit of the financial statements is discussed, and is also available for the General Meeting, in which the adoption of the financial statements is handled. The external auditor also attends the meeting of the Supervisory Board held to discuss the six-monthly figures. In principle, the external auditor attends the meetings of the Risk and Audit Committee, unless that committee determines otherwise. The external auditor immediately informs the chair of the Risk and Audit Committee if, in the course of its audit task, it encounters any actual or suspected abuses or irregularities. If an actual or suspected abuse or irregularity concerns the functioning of an Executive Board member, the external auditor reports this to the chair of the Supervisory Board. EY has been the external auditor since the 2014 reporting year; its appointment lasts up to and including 2021.
An independent and objective department, the internal audit function provides assurance and conducts consultancy assignments in order to realise added value for and improve the operational activities of the organisation. The internal audit function helps the organisation to realise its objectives by evaluating and improving the effectiveness of governance, risk-management and control by means of a systematic and disciplined approach. NS Audit falls under the Executive Board; it reports directly to the NS Chair and CEO and discusses the operational affairs of the department. NS Audit also reports to the chair of the Risk and Audit Committee. The NS Audit Director has direct access to the NS Chair and CEO, the chair of the Risk and Audit Committee, the members of the Executive Board and the external auditor.
Internal Audit keeps the Executive Board, Risk and Audit Committee and external auditor informed about:
the implementation of the annual audit plan;
any deficiencies in the effectiveness of the internal risk management and control systems;
findings and observations that significantly affect the risk profile of NV Nederlandse Spoorwegen and its associated enterprises;
shortcomings in the follow-up of recommendations by Internal Audit.
In 2019, the compulsory external test of the department was performed by the Institute of Internal Auditors, which issued a positive final opinion. This investigation is mandatory under the Quality Testing Regulations of IIA Nederland. The external auditor and NS Audit work together with due regard for their specific assigned duties.
Governance and safety
NS has established a Safety Consultation Platform, which is chaired by the NS Risk Director. Line managers responsible for the business units, IT and security report to this central body on safety risks. The NS Risk Director makes sure that the chosen risk appetite is reflected properly in the management of the safety risks. One of the safety domains within NS is cybersecurity. The ongoing digitalisation of operational processes at NS has increased the significance of cyber issues. The Executive Board takes an active interest in this subject. It supervises the implementation of the NS cyber strategy and has set up an investment programme to promote structural improvements. In addition, the cyber risks issue is the subject of a joint project with the Ministry of Infrastructure and Water Management and ProRail. NS co-chairs the recently established public-private European Rail partnership for cybersecurity.
As leaders in sustainable mobility, we willingly take on responsibility for facilitating and realising sustainability in cooperation with partners. We do so by having NS business units develop plans and implement activities on the strategic themes of climate, circularity and inclusion. Policy and investment proposals must include assessments of their impact on sustainability. The Council for Sustainable Business Practices is NS's policy preparation body for sustainability issues. The Council is comprised of the business unit and staff department directors and its meetings are chaired by the Member of the Board for Commerce & Development. It receives advice from the Sustainable Business Practices Working Group, which includes representatives of the business units and staff departments. The Sustainable Business Practices Staff Department supports the Council, the Working Group and the business units, coordinating and stimulating the desired developments. Where necessary, proposed decisions and policies are submitted for approval to the Executive Board. Progress and development in sustainability results are monitored and managed through the regular planning, control and reporting cycle. The Sustainable Business Practices Council periodically discusses the KPI reports on sustainability results. In accordance with the Code, the Executive Board is responsible for the aspects of Corporate Social Responsibility that are relevant to NS. The Executive Board reports on this to the Supervisory Board and the General Meeting.
Except for the appointment of a new Sustainability Director, no changes have occurred in the governance and organisation of sustainability in 2019.