Corporate governance

General
Royal Haskoning is a private limited company with a full structure regime. The shares in Royal Haskoning are held by the Stichting Beheer Aandelen Haskoning (‘SBAH’) and the B.V. Gemeenschappelijk Bezit Aandelen Haskoning I (‘GB 1’). The objective of SBAH is to manage the shares of Royal Haskoning (and the shares of GB1). The objective of GB1 is defined in the articles of association as the participation in the capital of Royal Haskoning.

The management of SBAH is made up of two representatives from the Supervisory Board, one representative from the Board of Management and three representatives from the highest echelons of Royal Haskoning staff, which means that a number of checks and balances have already been built in.

Royal Haskoning has drawn up a Code of Conduct alongside the corporate governance rules. How people within Royal Haskoning deal with one another, what the rules of conduct are and how Royal Haskoning defines good business practice are set out in Royal Haskoning's publication People Business.

Application of the Code Tabaksblat (the Dutch guide to corporate governance)
The Principles and Best Practice Provisions of the Code Tabaksblat are divided into five chapters: (I) Observance and Enforcement of the Code, (II) Management, (III) Supervisory Board, (IV) (Annual General Meeting of) Shareholders and (V) Audit of the financial report, internal audit function and outside auditor.

The Code recommends an ‘apply or explain’ principle, so we indicate which parts of each of these five chapters are not applied and why not. This means that parts of the Code that are not mentioned are applied in full. Where actions to implement corporate governance still have to taken this is stated.

Chapter I - Observance and Enforcement of the Code
Royal Haskoning applies the rules in this chapter in full. There are no actions still to be taken in accordance with the provisions of this chapter.

Chapter II - Management
• Remuneration Policy
• Best Practice Provisions
• Actions

Remuneration Policy
The Remuneration Policy followed by the Board of Management is posted on the website.

Departures from Best Practice Provisions
Managers’ terms of appointment. Royal Haskoning does not apply the rule that managers are appointed or reappointed for periods of a maximum of four years, as this does not fit in with the nature of the business. It can have an adverse effect on employees’ career prospects and consequently also impact on Royal Haskoning’s attractiveness to new employees.

Option Rules
The rules about options are not applied because options are not a component of remuneration at Royal Haskoning. Managers do, though, participate in the certificate scheme that is widely applied in Royal Haskoning and is not restricted to managers.

Regulations governing the ownership of and transactions in shares
At Royal Haskoning the Code’s prescribed rules for share ownership by managers only applies to share ownership above a threshold amount—yet to be established—in companies operating in the same sector as Royal Haskoning. However, the rules also apply if those companies are not quoted on the stock exchange. The nature of Royal Haskoning’s business is such that concern about managers’ share ownership, other than in (potential) competitors of Royal Haskoning, is not appropriate and not deemed useful.

Compensation for dismissal
Royal Haskoning does not apply the rule that the compensation for the dismissal of a manager will be a maximum of one year’s salary. Royal Haskoning considers it appropriate to leave the decision to the court.

Disclosure of the most important elements of contracts with managers
Royal Haskoning confines itself to making public what is prescribed by law, since disclosure of other elements could cause knowledge of said elements to come into the hands of people or organizations who do not have sufficient interest in protecting them.

Remuneration Report Disclosure
Royal Haskoning also does not make public the remuneration report with regard to its managers, for the same reason as Royal Haskoning does not make public the elements of the contracts with managers other than according to the legal requirements (see above).

Actions
• There are no actions still to be undertaken

Chapter III – Supervisory Board
• Profile
• Best Practice Provisions
• Actions

Profile
The profile used for the appointment of supervisory board members is posted on the website.

Schedule of resignation

Departures from Best Practice Provisions

Independence
Royal Haskoning does not apply the provisions of the Code concerning the independence of members of the supervisory board with regard to the membership of the management of SBAH (see above), as the combination of this membership with membership of the Royal Haskoning supervisory board is the way in which the right balance is found between the interests of the various stakeholders in Royal Haskoning.

Former manager as chairman of the Supervisory Board
The ban on a former manager acting as chair of the Supervisory Board envisaged by the Dutch corporate governance code is not applied at Royal Haskoning. Royal Haskoning will, though, impose a term of four years before a former manager may hold the post of chairman. After four years the arguments in favour of a general ban no longer carry sufficient weight.

Independence of a supervisory board member who temporarily acts as manager because of lack or absence of managers
Royal Haskoning does not apply the rule of the Code that a supervisory board member, who has temporarily replaced the manager, is not regarded as independent. The application of this rule could make acting in this capacity, which may be necessary, unattractive. A supervisory board member who acts as such temporarily will resign as a supervisory board member; this board member will again take up his position for the remainder of his original term after the temporary management has come to an end.

Remuneration committee and selection and appointment committees
These committees of the Supervisory Board, which the Code deems advisable as a general rule, have not been compulsorily set up at Royal Haskoning, as the activities of these committees in Royal Haskoning can be easily performed by the full board or by ad hoc members present.

Remuneration regulations and the ownership of and transactions in shares
The remuneration of the Supervisory Board is fixed by the annual general meeting of shareholders. The remuneration is adjusted annually in line with inflation. An outside expert evaluates the remuneration in terms of the median of the labour market at least once every four years. The rules prescribed by the Code for supervisory board members’ share ownership only apply at Royal Haskoning to share ownership above a threshold amount, of 0,5%, in companies operating in the same sector as the Koninklijke Haskoning Groep B.V. However, the rules also apply if those companies are not quoted on the stock exchange. The nature of Royal Haskoning’s business is such that concern about supervisory board members’ share ownership, other than in (potential) competitors of Royal Haskoning, is not appropriate and not deemed useful. No shares or share certificates are granted to supervisory board members. No guarantees or personal loans are granted to supervisory board members.

Actions
There are no actions still to be undertaken

Chapter IV - (Annual general meeting of) shareholders

• Best Practice Provisions
• Actions

Departures from Best Practice Provisions

Public announcements about private offers
Royal Haskoning makes no public announcements about any offers for its shares. Since all shareholders (and certificate holders) are known there is no need to make such announcements. Royal Haskoning treats all certificate holders equally.

Contacts with analysts
The provisions of the Code governing contacts with analysts are not applied as Royal Haskoning is not quoted on the stock exchange.

Announcements about protection measures
Royal Haskoning makes no announcements about protection measures as Royal Haskoning is not quoted on the stock exchange and the conditions of certification are sufficiently familiar to the certificate holders.

Provisions relating to institutional investors
Royal Haskoning does not apply these provisions as Royal Haskoning has no institutional investors as shareholders.

Actions
There are no actions still to be undertaken

Chapter V – The audit of the financial report and the position of the internal audit function and that of the outside auditor

• Royal Haskoning Annual Report
• Best Practice Provisions

Actions
Royal Haskoning annual report
Royal Haskoning’s annual report is posted on the website.

Departures from Best Practice Provisions

Appointment of the outside auditor
The outside auditor is appointed by the annual general meeting of shareholders on a proposal by the Supervisory Board. The written confirmation of the task of the outside auditor to perform both auditing activities and non-auditing activities is signed by the Chair of the Supervisory Board. The assignment to carry out auditing activities is given on the basis of an audit plan at a separately agreed remuneration. The Supervisory Board is informed annually about the total remuneration due to the outside auditor. This is a satisfactory and acceptable procedure for a business like Royal Haskoning.

Attendance by the outside auditor at the annual general meeting of shareholders
Contrary to the requirements of the Code the outside auditor does not attend the annual general meeting of Royal Haskoning shareholders, since the representatives of the shareholders together with the outside auditor attend a specially convened meeting of the Supervisory Board so that the financial reports can be discussed.

Rules about internal accounts departments
The rules of the Code about internal accounts departments are not applied as Royal Haskoning does not have an internal accounts department.

Actions
There are no actions still to be undertaken