Auditors

The external auditor is appointed by the on proposal of the Supervisory Board. The appointment is reviewed every four years and the results of this review and assessment are reported to the AGM.

The external auditor attends all meetings of the Audit Committee, as well as the meeting of the Supervisory Board at which the financial statements are adopted. During these meetings, the auditor discusses the outcome of the audit procedures and the reflections thereof in the auditors’ report and the management letter. In particular, the key audit matters are highlighted. The auditor receives the financial information and underlying reports of the quarterly figures and is given the opportunity to comment and respond to this information.

The lead external auditor is present at the AGM and may be questioned with regard to his statement on the fairness of the financial statements.

Auditor independence and mandatory succession of audit firm

The Audit Committee and the Board of Management report their dealings with the external auditor to the Supervisory Board annually and discuss the auditor’s independence. Based on auditor independence requirements, the lead auditor in charge of the AkzoNobel account is changed every seven years.

The Dutch Audit Profession Act (Wet op het accountants-beroep), requires rotation of our audit firm after the audit firm has performed the statutory audits of the company for a period of eight consecutive years. In 2015, European law was adopted which prevails over Dutch law, changing the mandatory rotation terms to five years for the lead partner and ten years for the audit firm, with an extension of the mandatory first rotation varying with the length of the tenure of the existing firm. The on April 29, 2014, appointed PwC in respect of the audits of the financial statements as of 2016 and, despite a potential respite by virtue of the new European legislation, the Supervisory Board has decided not to propose a reversal of this 2014 decision to end the mandate of KPMG following the reporting on the financial year 2015.

Non-audit services

One area of particular focus in corporate governance is the independence of the auditors. The Audit Committee has been delegated direct responsibility for the compensation and monitoring of the auditors and the services they provide to the company. Pursuant to the Audit Profession Act, the auditors are prohibited from providing the company with services in the Netherlands other than “audit services aimed at providing reliability concerning the information supplied by the audited client for the benefit of external users of this information and also for the benefit of the Supervisory Board, as referred to in the reports mentioned.” The company has taken the position that no additional services may be provided by the external auditor and its global network that do not meet these requirements, unless local statutory requirements so dictate. In order to anchor this in our procedures, the Supervisory Board adopted the AkzoNobel Rules on External Auditor Independence and Selection and the related AkzoNobel Guidelines on Auditor Independence. All these documents are available on the company’s corporate website.

AGM

Annual General Meeting of shareholders.

AGM

Annual General Meeting of shareholders.