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Corporate governance

Corporate governance is the framework of practices, rules and regulations that ensure ICT’s accountability and transparency to its stakeholders. It also includes ICT’s code of conduct, clear business principles and the whistle-blower policy.

Roles and responsibilities

ICT Group N.V., a public limited liability company incorporated under Dutch law with its registered office in Barendrecht, the Netherlands (the “company”) is the parent company of the ICT group of companies. The company’s shares have been listed on Euronext Amsterdam since 1997. The company qualifies as a ‘large company’ (structuurvennootschap) within the meaning of the Dutch Civil Code and applies the relevant rules of Dutch corporate law.

The company has pursued a consistent policy to align its corporate governance with Dutch law and the Dutch Corporate Governance Code. The company will continue to enhance transparency and communications with investors and other stakeholders in the company.
In this report, the company addresses its overall corporate governance structure and states to what extent it applies the principles and best practice provisions of the Dutch Corporate Governance Code 2016. Relevant substantial changes in the company’s corporate governance structure are proposed for approval to the General Meeting of Shareholders. More detailed information on ICT’s corporate governance and the related rules and regulations can be found on the company’s website (https://ict.eu/about-us/investor-relations/).

Executive Board

The company has a two-tier board structure, comprising an Executive Board and a Supervisory Board. The Executive Board is responsible for the management of the company and for determining the long-term objectives and strategy, financing, compliance with relevant laws and regulations and the management of risks. In accordance with the company’s objectives and Dutch law, the Executive Board manages the company, taking into account the interests of all relevant stakeholders. The Executive Board is supervised by the Supervisory Board. The Executive Board provides the Supervisory Board with all the information the Supervisory Board needs to fulfil its responsibilities. Certain decisions of the Executive Board require the approval of the Supervisory Board, as laid down in the Executive Board regulations, which can be found on the company’s website. In addition to legal regulations, these regulations describe how the Executive Board works.

Appointment of members of the Executive Board
Members of the Executive Board are appointed by the Supervisory Board. The Supervisory Board shall inform the General Meeting of Shareholders and the Works Council in advance of a proposed appointment. The members of the Executive Board are appointed for a term of four years. This term expires at the end of the General Meeting of Shareholders to be held in the fourth year after the year of their appointment. Reappointment is possible for consecutive terms of four years.
Members of the Executive Board may be suspended or dismissed by the Supervisory Board. In the event of a dismissal, the General Meeting of Shareholders shall be consulted.

Supervisory Board

The Supervisory Board is responsible for supervising and advising the Executive Board and overseeing the policies of the Executive Board and the general course of affairs of the company and its business. The Supervisory Board supervises how the Executive Board determines the long-term value creation strategy and how the Executive Board implements that strategy. Supervision also focuses on the set-up and operation of internal risk management and related control systems, the financial reporting processes, compliance with legislation and regulations, corporate social responsibility and the activities of the Executive Board regarding the culture within ICT. In fulfilling its responsibilities, the Supervisory Board is guided by the interests of the Company, its business and the interests of all relevant stakeholders.

Under Dutch law and in accordance with the provisions of the Code, the Supervisory Board is a separate body that is independent of the Executive Board and all its members are independent.
The Supervisory Board has two separate committees: the Remuneration and Appointment Committee and the Audit Committee. The Supervisory Board as a whole is responsible for the supervisory tasks. The Supervisory Board works according to the Supervisory Board regulations that include a detailed description of its tasks and responsibilities. These regulations also contain the tasks and responsibilities of the Remuneration and Appointment Committee and the Audit Committee and can be found on the company’s website.

Appointment of members of the Supervisory Board
The members of the Supervisory Board are appointed by the General Meeting of Shareholders based on a nomination of the Supervisory Board. The Supervisory Board informs the general meeting and the works council simultaneously of the nomination. The general meeting and the works council may recommend to the Supervisory Board persons for nomination as supervisory directors. The Supervisory Board shall for that purpose inform the general meeting and the works council in a timely fashion when a vacancy is to be filled. The general meeting may reject the nomination of the Supervisory Board with an absolute majority of the votes cast, representing at least one-third of the issued capital.

For a third of the members of the Supervisory Board, the Works Council has the right to recommend a candidate. The Supervisory Board may object to this recommendation if it considers the recommended person to be unsuitable to fulfil the duties of a Supervisory Board member, or if it believes that the Supervisory Board would not be properly composed if the appointment were made according to said recommendation. The Supervisory Board must inform the Works Council of its objection and consult with the Works Council to reach agreement on the nomination. If no agreement can be reached, the Enterprise Chamber of the Amsterdam Court of Appeal can be asked to render a decision on the objection.

Members are appointed for a period of four years and may be re-elected for another four years in compliance with the Corporate Governance Code. A Supervisory Board member may thereafter be reappointed again for a period of two years and that appointment can in principle be extended by at most two years. In the event of a reappointment after an eight-year period, the reason for said reappointment will be explained in the report of the Supervisory Board. The members of the Supervisory Board can only be dismissed by the Enterprise Chamber of the Amsterdam Court of Appeal. The entire Supervisory Board shall resign in the event the General Meeting of Shareholders adopts a motion of no confidence against the Supervisory Board. A Supervisory Board member may be suspended by the Supervisory Board; the suspension shall end by operation of law if the company has not applied to the Enterprise Chamber to remove the member within one month after the commencement of the suspension.

The Supervisory Board is assisted by the Company Secretary. The Company Secretary shall ensure that correct procedures are followed and that the Supervisory Board acts in accordance with its statutory obligations and its obligations under the Articles of Association. Furthermore, the Company Secretary assists the Chairman of the Supervisory Board in the actual organisation of the affairs of the Supervisory Board. The Company Secretary shall, either on the recommendation of the Supervisory Board or otherwise, be appointed and may be dismissed by the Executive Board following the approval of the Supervisory Board.
Following their appointment, all members of the Supervisory Board follow an introductory programme, which covers general financial and legal affairs, financial reporting by the company, any specific aspects that are unique to the company and its business activities, and the responsibilities of a Supervisory Board member. Any need for further training or education of the members is reviewed annually.

General meeting of shareholders

An Annual General Meeting of Shareholders is held once a year in Barendrecht, Rotterdam or Amsterdam, such within six months of the end of the financial year. Extraordinary General Meetings of Shareholders may be convened by the Executive Board or the Supervisory Board if deemed necessary and by shareholders representing 10% of the issued capital after judicial authorisation. Meetings are convened by public notice sent by way of an announcement published electronically, which will be immediately and permanently accessible to the general meeting, for at least 42 days prior to the (Extraordinary) General Meeting of Shareholders. Those shareholders who alone or jointly represent at least 3% of ICT’s issued share capital may request items be added to the agenda of the General Meeting of Shareholders. Such a request will be granted if it is received in writing at least 60 days before the meeting, stating the reasons for said request. Every shareholder is entitled to attend the meeting and to speak and vote during the meeting. Each share carries one vote. The specific powers and responsibilities of the General Meeting of Shareholders are described in the Articles of Association that are available on our website. An amendment of the Articles of Association requires the approval of the General Meeting of Shareholders.

Purchase and issue of (rights to) shares
The Annual General Meeting of Shareholders on 10 May 2017 resolved to authorise the Executive Board, subject to approval of the Supervisory Board, to acquire fully paid-up ordinary shares in the company’s own capital to a maximum of 10% of the subscribed capital of the company within the limits of the Articles of Association for another 18 months as of 10 May 2017. In addition, the Annual General Meeting of Shareholders resolved to authorise the Executive Board, subject to the approval of the Supervisory Board, to issue shares or grant rights to acquire shares in the company, as well as to restrict or exclude the pre-emptive right pertaining to such shares for 18 months as of 10 May 2017. This authorisation is limited to a maximum of 10% of the number of shares issued as of 10 May 2017, plus 10% of the issued capital in connection with or on the occasion of mergers, acquisitions or strategic alliances.

Stichting Administratie Participatieplan ICT (STAK)

ICT introduced an equity participation plan for all ICT employees with a permanent employment contract. Once per calendar year the employees are given the opportunity to purchase ICT shares at a 13.5% discount on the stock exchange price. After three years, each employee will receive, for every four shares purchased, a cash bonus equal to the market value of one ICT share at the time the cash bonus becomes payable. Employees may participate in the plan for a minimum amount of € 500 and maximum amount of € 5.000 per year.
Shares bought at a 13.5% discount are subject to a lock-up period of three years. Even if the employment is terminated before the end of the lock up period, the shares remain blocked until the end of the lock up period. During this period the shares cannot be sold. The cash bonus is payable if the employee is still employed by ICT after the three year lock up period. If an employee retires during the lock up period, his or her rights to a cash bonus will sustain.

Shares purchased under the participation plan are administered by Stichting Administratie Participatieplan ICT (STAK) that will issue one depositary receipt in exchange for one share. Depositary receipts for shares follow the share price, but have different rights. Economic benefits such as the right to dividend belong to the holder of the depositary receipt. Legal ownership (including the right to vote) lies with the STAK. The board of the STAK exercises the voting right on the shares it administers.

Anti-takeover measures

As a means to protect the company and its stakeholders against an unsolicited attempt to obtain (de facto) control of the company, the company’s Articles of Association authorise the Executive Board and the Supervisory Board to issue (rights to) preference shares to Stichting Continuïteit ICT under an option agreement entered into between the company and the Stichting. The objective of the Stichting is to safeguard the interests of the company, its business and all its stakeholders. Based on the option agreement, the Stichting may subscribe for a number of preference shares equal to the number of the outstanding ordinary shares in the company less one. The issuance of preference shares is an anti-takeover measure. When taken, this protective measure is temporary in nature and would enable ICT to judge any (hostile) situation on its merits and/or to explore alternatives. The Stichting has a credit facility to enable it to pay the amount to be paid up on the shares. This amount equals 25% of the nominal value of the protective preference shares issued. As at 31 December 2017, no protective preference shares had been issued.

The Stichting has an independent board. As at 31 December 2017, the board consisted of the following members: Mr. H.J.A. Knijff (chairman), Mr. R. ter Haar, Mr. P.F. Plaizier and Mr. J.C.M. Schönfeld.

Adherence to the Dutch Corporate Governance Code 2016

ICT complies with the provisions of the Dutch Corporate Governance Code 2016, with only a few deviations as described below. The Dutch Corporate Governance Code is available at www.mccg.nl.

Best practice provision 2.7.2 (ii): There is no regulation covering private investments by members of the Supervisory Board or members of the Executive Board other than securities issued by ICT Group N.V. Members of these boards are already subject to general legislation and regulations.

Best practice 3.4.1: Performance criteria for the variable remuneration of members of the Executive Board are described in general terms but not fully disclosed, as they contain sensitive information and could contain information of an otherwise confidential nature that ICT Group may not want to disclose.

Best practice 4.2.3.: Meetings between ICT Group and analysts, the press and/or investors will not be webcast due to cost considerations. The dates of the analyst and press meetings will be published on the website in advance and the presentation will be made available on the website.

Diversity

ICT aims for diversity not only in terms of experience, but also in terms of nationality, gender and age at all levels within the company.
With the exception of gender diversity, the composition of both the Executive and Supervisory Board is diverse.
The company currently does not have the desired allocation of seats to men and women on the Executive and Supervisory boards. There are currently no female members on the Executive Board, nor on the Supervisory Board. Any recommendation for appointments to the General Meeting of Shareholders takes into account experience, background and other diversity factors. ICT strives to have at least 30% females among the members of its Supervisory and Executive Boards and will, when positions become vacant, specifically look for female candidates.

As regards senior management and in order to improve gender diversity throughout the company, the company focusses on fostering female talent across the group, encouraging women’s networks and mentoring programmes and promoting gender equality in general. We are making a concerted effort to increase the number of female students in technical studies, which should ultimately be reflected in a more balanced proportion of male/female professionals in this field.

ICT employs people from all over the world, covering some 30 different nationalities bringing a diversified range of nationalities to ICT’s work force. ICT supports these international employees in the integration process and offers all the help it can on the social front and with other more practical day-to-day issues.

Business ethics and compliance

ICT clearly communicates the framework of business ethics and procedures are in place to safeguard adherence to and compliance with principles and policies. If and when employees raise ethical concerns, ICT is committed to responding appropriately to misconduct.
All ICT companies and ICT-operated joint ventures must comply with the laws and regulations of the countries in which they operate, such as the relevant legal standards regarding the health and safety of employees, third parties and the environment, and must conduct their activities in line with the ICT Code of conduct and our core values. Respect for human rights is embedded in the Code of Conduct. ICT makes strong efforts to create a positive, transparent working environment that is free from discrimination, harassment and/or intimidation and in which all employees have equal access to information and opportunities.

Employees are encouraged to report any violation of any of the standards and practices as laid down in the Code of Conduct. Such report may be made anonymously via the Company’s Whistle-blower Policy, as posted on the company’s website. In the past year, no such incident has been reported. These policies, the Code of Conduct and the Whistle-blower Policy, are clearly brought to the attention of all new employees.

Declarations

In 2017, there were no transactions of material significance that involved a conflict of interest for any member of the Executive Board or Supervisory Board.

No transactions of material significance were conducted between ICT Group and any natural person or legal entity holding more than 10% of ICT Group’s shares.

In the event of a take-over change of control clauses in contracts are not expected to have a significant impact on the financial performance of ICT.

The statement concerning corporate governance as referred to in article 2a of the decree on additional requirements for annual reports (Vaststellingsbesluit nadere voorschriften inhoud jaarverslag) can be found on our website.

The information related to inclusion of the information required by Article 10 of the Takeover Directive, as required by article 3b of the Decree, is included in this report in the sections Shareholder information, Corporate Governance, Declarations and Remuneration report.