The Audit Committee met five times in 2019. In general, all meetings are attended by the CFO, director Audit & Security, director group Finance, director Accounting & Reporting and the external auditor, EY. The CEO attends the Audit Committee meetings when the half-year and full-year results are being discussed. The chairman of the Audit Committee meets the external auditor without management regularly. Additionally, the director Audit & Security regularly meets the chairman of the Audit Committee without management, and meets the chairman of the Supervisory Board at least once a year.
At each meeting, the Audit Committee discusses the results of and developments in PostNL’s business segments. In 2019, the Audit Committee discussed PostNL’s full-year 2018 results, the outlook for 2019, the 2019 first quarter, half-year and third quarter results and the related press releases, and the 2020 budget. Furthermore, the Audit Committee discussed the Eumedion, VEB and VBDO focus letters, the risk paragraph and the quantity and quality of the explanatory notes in the financial reports of the 2018 Annual Report and the preparation of PostNL’s 2019 Annual Report.
The main financial factors influencing the strategic plan and PostNL’s financial performance, including volume developments, pricing, cost savings, competition, regulatory developments, economic developments, pensions, and employee conditions were discussed. The Audit Committee also discussed the issuance of the Green Bond, the plan for improvement of working capital and subsequent results, consolidation, the strategy to improve the balance between volume growth, profitability and cash conversion at Parcels as presented during the capital markets day, (interim) dividend and dividend policy, PostNL’s pension obligations, the divestment of Postcon and Nexive, and the relevant 2019 tax matters, including matters such as transparency, tax planning, and tax risk management.
The Audit Committee discussed reports on internal control and risk management (reports which are, if necessary, also discussed in the Supervisory Board). Reports from the internal audit function and the external auditor, including the internal audit and EY's audit plan and EY’s board reports, were discussed regularly. The Audit Committee receives and discusses half-yearly updates on integrity issues (including the fraud & whistle-blower report), claims and litigation, compliance and any actions taken by management, if applicable. Fortunately, no material fraud-related incidents were reported in 2019.
The external audit fees were discussed and approved, and the performance of EY was discussed. Furthermore contemplated changes in the laws and regulations governing financial reporting, the quality assessment and performance of PostNL’s internal audit function and the development of the actions to mitigate the deficiencies reported by the external and internal audit functions over 2018 were discussed.
The Nomination Committee met five times and had one meeting by telephone in 2019. The Nomination Committee discussed the selection and nomination of new members for the Supervisory Board, and has held several interviews with potential candidates. Furthermore the overall composition of the Supervisory Board and its committees were discussed. The Nomination Committee also discussed succession planning and talent management in respect of the Supervisory Board, the Board of Management and senior management, and diversity and inclusion within the company.
In 2019, the Remuneration Committeeme met four times and had one meeting by telephone. It discussed the remuneration of the members of the Board of Management and the Executive Committee and of senior management, PostNL’s remuneration policy and the preparation of the discussion of the remuneration policy at the 2019 AGM. The Remuneration Committee extensively discussed the implementation of the shareholders rights directive into Dutch legislation and the impact thereof on the remuneration policy for the Board of Management and Supervisory Board and on the remuneration report. A road show was held together with the Director of HR, with investors and other stakeholders to discuss the new proposed remuneration policies for the Board of Management and Supervisory Board. Further details on remuneration for the Board of Management and the Supervisory Board can be found in the chapter 'Remuneration report', which includes a further explanation of the remuneration policy and the actual remuneration and relationship between remuneration and performance of members of the Board of Management for 2019, and provides further insight into the new proposed remuneration policies.