Investor relations | Corporate Governance

Holland Colours is a limited liability company with common shares publicly listed on the Euronext Amsterdam stock exchange. The company’s management structure complies with Dutch law and has a two-tier structure consisting of a Board of Management and a Supervisory Board. Holland Colours promotes responsible behavior towards society and the environment, while at the same time taking into account the interests of its various stakeholders: employees, shareholders, other capital providers, customers and suppliers. The Board of Management and Supervisory Board are ultimately accountable for giving due consideration to the interests of all parties involved, focusing on the continuity of the company and long-term value creation for relevant stakeholders, both at present and in the longer term, and are held accountable for the performance of their duties by the Annual General Meeting of Shareholders (AGM). The risk management strategy and the internal control framework play an important role in this process. For a description of these systems, please refer to the section on Risk Management.

Corporate Governance Framework

Holland Colours is incorporated and based in the Netherlands. As a result, our governance structure is based on the requirements under Dutch legislation and the company’s Articles of Association, complemented by internal policies and procedures. Given the worldwide exposure of our business, we conduct our operations in accordance with internationally accepted principles of good governance. Good corporate governance, long-term value creation and engagement are key components of the Holland Colours culture and way
of doing business. They are embedded in our core values. Holland Colours endorses the principles of the Dutch Corporate Governance Code (the ‘Code’), the content of which is available at www.mccg.nl.

The Code is reflected in the regulations of the Board of Management and the Supervisory Board. In addition, the Diversity Policy and a Policy on Bilateral Contacts with shareholders have been updated, and the Articles of Association of Holland Colours have been aligned with the Code.

The statutory responsibility resides with the Board of Management. This consists of the CEO, CFO and CTO. At this moment the CFO position is vacant, and temporarily filled by a non-statutory interim CFO. They convene every two weeks with a formal agenda and a list of action items and decisions made. The Board of Management holds regular meetings with the divisional management teams for monthly business reviews and quarterly updates on major projects. Large product, technology, innovation and capex projects need specific approval by the Board of Management. Cost budgets are approved as part of the annual budget review. During the extraordinary circumstances related to COVID-19, the Board of Management and divisional managers participated in regularly digital meetings to discuss, align and act on the actual situation, and the Supervisory Board was kept informed.

The Board of Management is held accountable by the Supervisory Board for defining and implementing the company’s strategy as well as its day-to-day operational management. The members of the Board of Management attend the periodic meetings of the Supervisory Board as well as incidental update calls. The CEO is the main contact for the Supervisory Board.

Annual General Meeting of Shareholders

The AGM is an integral part of the company’s governance and its system of checks and balances. The AGM reviews the Annual Report and decides on the adoption of the financial statements, the dividend proposal, the discharge of their duties performed by the members of the Supervisory Board and the Board of Management, and the adoption of the remuneration policy of the Board of Management and the Supervisory Board.

The AGM is convened by public notice. The agenda, the notes to the agenda and the procedure for attendance and voting at the meeting are published in advance and posted on the corporate website. Matters proposed for consideration, approval or adoption are dealt with as separate agenda items and explained in writing in advance of the meeting.

These proposals include, where applicable:
• Adoption of the financial statements;
• Dividend proposal;
• Discharge of their liability for the duties performed by the members of the Supervisory Board and the Board of Management;
• Appointment and reappointment of members of the Board of Management and the Supervisory Board;
• Remuneration policy of the Board of Management and the Supervisory Board;
• Appointment of the auditor;
• Other important matters, such as major acquisitions or the sale or demerger of a substantial part of the company, as required by law or under the Articles of Association;
• Authorization of the Board of Management to issue new shares;
• Amendments to the Articles of Association.

The company provides options to its shareholders for voting by proxy. Holding shares in the company on the registration date determines the right to exercise voting rights and other rights relating to the AGM. All resolutions are adopted according to the ‘one share, one vote’ principle and by an absolute majority of votes, unless the law or the company’s Articles of Association stipulate otherwise.

Holders of common shares that in total represent at least 1% of the total issued capital may submit proposals for the AGM agenda. Such proposals must be adequately substantiated and must be submitted in writing, or electronically, to the company at least 60 calendar days in advance of the meeting. The draft minutes of the AGM (in Dutch) are made available on the company’s corporate website within three months of the meeting date. The final minutes (in Dutch) are available on the corporate website within six months after the meeting date.

Diversity policy

Holland Colours highly values diversity and endeavors to reflect this in the composition of its Board of Management and Supervisory Board. The objective of the Diversity Policy is to enrich the Board of Management’s perspective, improve performance, increase member value and enhance the probability of achievement of Holland Colours’ goals and objectives. The policy is designed to promote diversity, including in terms of nationality, age, gender, education and professional background. One out of four members of the Supervisory Board is female. Until February 2022, the Board of Management consisted of one woman and two men. Following the departure of Tanja van Dinteren, the Board of Management temporarily consists of two men. Further information about the composition of the Board of Management and the Supervisory Board can be found in the reports of the Board of Management and the Supervisory Board (and its profile).

Committees

There are two committees of the Supervisory Board: the Audit Committee and the Remuneration Committee.

Audit Committee
The Audit Committee assists and advises the Supervisory Board in its responsibility of supervising the integrity and quality of Holland Colours’ financial reporting and the effectiveness of its internal risk management and control systems. The Audit Committee consists of Roland Zoomers (chair) and Jorrit Klaus, who both qualify as financial and risk experts.

Remuneration Committee
The Remuneration Committee (‘RemCo’) assists and advises the Supervisory Board on matters relating to the selection and appointment of the members of the Board of Management and Supervisory Board. The RemCo also monitors and evaluates the remuneration policy for the Board of Management. The RemCo consists of Aukje Doornbos (chair) and Gert-Hein de Heer.

Anti-takeover provisions and control

The company has no specific anti-takeover provisions in place. The fact that the company has a majority shareholder, Holland Pigments BV, in which the collective employees have a shareholding of approximately 25%, guarantees that the voice of the employees is heard.

Bilateral contacts

The company fully endorses the importance of a transparent and balanced provision of information to its shareholders and other parties. In accordance with principle 4.2 of the Code, the company makes every effort to provide such parties with information that is relevant to shareholders, doing so equally and simultaneously, with due consideration of the exceptions provided for under applicable law. All this is set out in Holland Colours’ policy on bilateral contacts with shareholders. The full text of the policy is available on ww.hollandcolours.com.

Code of conduct

The Holland Colours Code of Conduct reflects our core principles on doing business in a fair and ethical way, complying with local rules and regulations, and treating our employees and business partners with respect. It provides guidelines for preventing unfair competition and corruption or bribery and states the conditions for a safe and healthy work environment. To emphasize the importance of this, Holland Colours has drawn up an Anti-Bribery and Anti-Corruption policy for all Holland Colours entities and employees. Holland Colours will also set up an Ethical Compass to emphasize the importance of integrity to employees. This compass will help them to take moral considerations into account around themes involving risk-sensitive integrity issues. Typical themes include fraud, bribery and corruption, psychological and physical safety, and cybersecurity. In addition, Holland Colours will introduce employee training with respect to ethical behavior and set up a due diligence process for all subsidiaries to screen for compliance issues, including anti-bribery and anti-corruption policies. Holland Colours has a global whistleblower policy, while adherence to the company core values is part of the annual employee performance review cycle.

Through our HP Officials – as appointed by Holland Pigments BV – and other channels, we maintain our unique employee participation model and culture.

Corporate Governance Code

The Supervisory Board and the Board of Management endorse the principles of Corporate Governance as established in the principles and best practice provisions that currently apply to internationally operating listed Dutch companies.

The full version of the Corporate Governance rules of Holland Colours, along with explanatory notes, is available on www.hollandcolours.com. The deviations from the Code relate to the subjects outlined below.

Board of management

The Code states that the main elements of the contracts of the company’s Board of Management members must be published without delay once the contract has been concluded. As we do not want to single out this type of information, Holland Colours continues to publish this information as an integral part of the Annual Report. The remuneration policy for the Board of Management for the year under review was formulated by the Remuneration Committee. It is further described in the Remuneration Report and Note 28 to the financial statements and will be proposed to the AGM for approval. Since Holland Colours does not offer remuneration in the form of options, the provisions governing options do not apply.

Supervisory board members

As long as Holland Pigments BV holds an interest of at least one-third of the company’s issued share capital, it is entitled to nominate one member of the Supervisory Board.

The Supervisory Board has established a Remuneration Committee and an Audit Committee. In deviation from Article 2.3.4, the chair of the Supervisory Board is also chair of the Audit Committee. This is on account of his expertise. The duties of the selection and appointment process are performed by all members of the Supervisory Board. The remuneration of the members of the Supervisory Board is set by the AGM.

Internal audit function

The internal audit function assesses the design and operation of the internal controls and the risk management system. Due to the size of the company this function is fulfilled, in deviation from Article 1.3, by the Group Controller. The Supervisory Board evaluates annually if it is necessary to establish an internal audit department and includes the conclusions in the report of the Supervisory Board.

Company secretary

Holland Colours does not have an official company Secretary. This position is fulfilled by the legal and governance function at the head office level, in line with the lean and effective organizational structure.

Conflicts of interest

As Holland Pigments BV is a majority shareholder in Holland Colours, with all employees of Holland Colours having shares in Holland Pigments, any transactions between Holland Pigments and the company that are of material significance are subject to approval by the Supervisory Board.

Shareholder powers

For practical reasons and because of the costs involved, the provision stipulating the option for shareholders to follow meetings with investors and analysts and presentations and press conferences in real time is not observed. All relevant information is immediately published on the company’s website. There have been no substantial changes to the corporate governance structure. The alignment with the Dutch Corporate Governance Code is published on the company website. Any future substantial changes will be submitted to the AGM.

The AGM held on July 15, 2021, authorized the Board of Management to acquire shares in Holland Colours for a period of 18 months, up to January 15, 2023, subject to the approval of the Supervisory Board. The acquisition price must be between the amount equal to the nominal value of the shares and the amount equal to 110% of the share price, whereby the share price will be: the highest average share price on each of the five trading days prior to the acquisition date in accordance with the Daily Official List of Euronext Amsterdam.

All documents related to the implementation of the Dutch Corporate Governance Code can be found in the Investor Relations section in the paragraph on Corporate Governance on our website. This includes the profile, regulation and schedule of retirement by rotation for the Supervisory Board, regulations of the Audit Committee and the Remuneration Committee, the Diversity Policy and the Policy on Bilateral Contacts with shareholders, the Remuneration Policy of the Board of Management, the Remuneration Policy of the Supervisory Board, the company’s Articles of Association, the Whistleblower Policy, Holland Colours’ Insider Dealing Policy and the minutes of the Annual General Meetings of Shareholders.

Prevention of Insider Trading

In compliance with the Dutch Financial Supervision Act, Holland Colours has adopted internal regulations regarding investments in the company’s shares, share ownership and preventing the abuse of insider information. Moreover, the duty of disclosure and the relevant best practice provisions of the Corporate Governance Code have been incorporated into these internal regulations where applicable.

These internal regulations apply to the Supervisory Board, the Board of Management and local managers and a circle of employees, as well as to a number of advisors. The Compliance Officer maintains a register, supervises compliance with the internal regulations and liaises with the Netherlands Authority for the Financial Markets (AFM).

Corporate Governance