Further topics discussed

In our scheduled meetings we addressed the focus items listed above, as well as topics that we address every year, including business, financial, market, and regulatory developments in PostNL’s business segments. The 2018 annual results, the 2019 quarterly and half-yearly results and the 2020 budget were discussed.

Other topics discussed include PostNL’s financial position, the re-appointment of EY as external auditor, IT developments, business continuity, (interim) dividend and PostNL’s dividend policy, growth, the company's culture and investor feedback after management roadshows and the new proposed remuneration policies for the Board of Management and Supervisory Board. Furthermore, the Supervisory Board discussed potential acquisitions and divestments, the preparation of the AGM and the compliance with the Code. Twice a year, the Supervisory Board discusses a litigation overview, describing claims (including tax) against PostNL and litigation concerning PostNL (with a threshold of €250,000). The Supervisory Board also receives an update on integrity (including the fraud & whistle-blower report) twice a year. The outcome of the risk management process, the main risks identified, and the mitigation plans in place to manage these risks were shared with the Audit Committee and with the Supervisory Board. A description of PostNL’s major risks and its risk management can be found in the chapter 'Risk management'.

The Supervisory Board performs an oversight role with respect to non-financial issues, supported by PostNL’s internal audit department, which monitors the non-financial governance structure and reporting. Next to this responsibility, the Supervisory Board discussed various non-financial related issues besides the topics addressed in the focus items listed above, including pensions, career and management development, the reputation of PostNL, customer satisfaction, the rating of PostNL in the Dow Jones Sustainability Index, and the relations between the Supervisory Board and the Board of Management with the works councils and trade unions.

Additionally, the 2018 auditor’s report by PostNL’s external auditor EY and the 2018 Annual Report (including Financial Statements and Non-Financial Performance Statements) were discussed. For 2019 EY reported that the main areas of risk (Key audit matters) are discontinued operations (including deferred tax asset), valuation of Mail investment, terminal due position and acquisition of Sandd. Compared to the key audit matters identified in 2018, acquisition of Sandd has been added as a key matter following the acquisition. Impact of laws and regulation on the valuation of the business of PostNL is no longer included as key audit matter as this mainly related to the discussion around significant market power and tariff setting for which there were only limited developments in 2019. Also EY updated the key audit matter deferred revenue and revenue related accruals (stamps and terminal dues) to revenue related accruals (terminal dues) since EY concluded the estimate in the deferred revenue position for stamps to be limited. In relation to the internal control framework, EY concluded that their audit approach resulted in a more substantive audit approach including the results of data analysis, instead of a full control reliance strategy. EY stressed he importance of the inclusion of sufficient preventive and automated controls including sufficient control test documentation going forward to make the internal control framework more robust. This will strengthen the internal control environment of PostNL and secondly allows EY to move towards a control based audit approach in 2020.

The Supervisory Board furthermore discussed its composition and that of its committees and the profile of the Supervisory Board. More details about the Supervisory Board can be found in the chapter 'Corporate governance '.

Also, following last year's evaluation of the Supervisory Board, an informal dinner was held with the Board of Management without agenda. In this session the most important themes for future success of PostNL were openly discussed, in order to learn from each others experiences and to further ensure alignment between the Supervisory Board and Board of Management. For 2020 a follow-up session will be held. Additionally, following last year's evaluation, the Supervisory Board has taken more time for discussion with the Supervisory Board only by making this a recurring item on the agenda of each meeting.