Supervisory Board Chairman’s statement
2014 has been a year of transition for the company and a year of advancement in pursuance of the company’s strategy. Despite challenging global and macro-economic circumstances we have sought to build on our successes to date, including our top ranking in the Materials industry group of the Dow Jones Sustainability Index for the third year in succession.
Following the completion of Karel Vuursteen’s 12-year term of office as member of the Supervisory Board, I was appointed as Chairman in April, 2014. At the same time, as part of our succession planning for the replacement of Sir Peter Ellwood – who stepped down after six years as Supervisory Board and Audit Committee member – we have welcomed Mr. Byron E. Grote to both the Supervisory Board and the Audit Committee. The Supervisory Board would like to express its gratitude for the commitment and services of Mr. Vuursteen and Sir Peter Ellwood.
Shortly before the end of the year, we sadly lost a valued member of the Supervisory Board when Mr. Dolf van den Brink passed away on December 22. Dolf was a respected and inspirational colleague who was held in the highest regard by us all. It was an honor and a pleasure to have worked with him. A Supervisory Board member for the last ten years, he leaves a professional legacy which the company will continue to draw from.
During 2014, the company welcomed Maëlys Castella to the Board of Management as Chief Financial Officer (CFO), succeeding Mr. Keith Nichols. Maëlys’ background in a broad set of corporate finance disciplines, as well as her experience in marketing to a large variety of customer end-user segments, has allowed her to make a strong start. The Supervisory Board members are pleased that her expertise will be applied in the development of future strategic agendas for the company.
While 2014 was a year that many had hoped would bring improvement in the global business climate, we in fact saw slowing growth in Asia, Russia and the eurozone, coupled with heightened tensions in regional diplomatic and economic relations. It is a sign of the strength and stability of the company’s strategy that despite the challenging economic environment, AkzoNobel’s performance has been maintained and enhanced in a number of key areas. This achievement provides the Supervisory Board with confidence in the Executive Committee’s strategic direction moving forward into the forthcoming year.
The Supervisory Board was provided with tangible insights into the impact of the company’s strategy during our visit to Frankfurt in Germany. Supervisory Board members were given a first-hand view of the company’s operations in the European chemical industry and a comprehensive impression of European competitiveness relative to other regions. This visit, as with other annual country visits, allowed us to appreciate the local and personal side of the AkzoNobel business and assisted us in maintaining a comprehensive understanding of management’s activities.
Throughout 2014, the company continued to seek advancement on its market leading positions through customer focused organic growth, operational excellence and sustainability. It has built on its core principles of Safety, Integrity and Sustainability through the introduction of our four, clear and simple values: Customer focused, Deliver on commitments, Passion for excellence and Winning together. Performance measurement and reporting tools have been built around these and targets have been established and linked to remuneration in order to embed a culture of continuous improvement. Transparency, accountability and messaging have also been improved. Such efforts enhance efficiencies and the Supervisory Board is happy to have seen the company progress towards its 2015 targets over the past year.
We are particularly proud that AkzoNobel has advanced on its Planet Possible sustainability program and was again ranked first on the Dow Jones Sustainability Index (in the Materials industry group). This is the third consecutive year that we have been ranked top, out of more than 350 companies, and the ninth consecutive year that we have been ranked in the top three. The ranking demonstrates the company’s sustainability performance and resource efficiency and is an example of our “Winning together” philosophy. After all, a sustainable business enhances value for all our stakeholders, while at the same time securing our own long-term success.
In the fourth quarter of 2014, the company was confronted with an external fraud targeted at one of its subsidiaries located in Chicago (US). After a thorough external investigation, it was concluded that customary and appropriate controls were in place, which were breached, and that creating ongoing awareness on fraud attempts is the additional effort needed. For more information, see the Risk management chapter.
The Supervisory Board is reassured by the fact that good corporate governance in particular has always been recognized as integral to the effective operation of AkzoNobel, the safeguarding of its assets and the achievement of its strategic objectives. In recognition of this, we dedicate a section of our annual report to Governance and compliance, where we elaborate on our corporate governance framework, remuneration policy, compliance codes and systems, integrity management and shareholder relations.
The Supervisory Board also appreciates its own vital role in the company’s governance and we take steps to ensure that we are adequately equipped, well trained and performance assessed. We engage in a thorough Board evaluation process, and you will see more details on all the activities of the Supervisory Board during the reporting year in this section, along with relevant information regarding the Supervisory Board members.
It only remains for me to thank my fellow Supervisory Board members for welcoming me as Chairman and for their support and commitment during the past year. I believe that our diverse mix of backgrounds and breadth of expertise will allow us to act seamlessly in our oversight of management and the company’s strategy and activities. We would like to thank the CEO, the new CFO, the other members of the Executive Committee and all employees for their dedication and hard work in securing the achievements of 2014.
Chairman of the Supervisory Board