Corporate Governance: Ownership
and compliance

Royal Schiphol Group N.V. , also trading as Luchthaven Schiphol and Schiphol Group, is a public limited liability company with a two-tier board regime. The shareholders of Schiphol Group are the State of the Netherlands, the municipality of Amsterdam, Groupe ADP and the municipality of Rotterdam. Schiphol Group's corporate governance structure is based on Dutch law, the Corporate Governance Code, its articles of association and several internal regulations.

General

Schiphol Group's articles of association have been recently updated so that these reflect applicable law and, to the extent possible and/or appropriate, the Corporate Governance Code 2016.

As of 2004, Schiphol Group applies the Corporate Governance Code. Schiphol Group has implemented the Code's principles and best practice provisions wherever possible and/or appropriate in its articles of association and regulations. Since 2016, Schiphol Group reports on its compliance with the Corporate Governance Code, by way of a 'comply or explain' overview.

Schiphol Group's internal regulations include the Management Board regulations, Supervisory Board regulations, including charters regarding the Supervisory Board's permanent committees, and regulations regarding Inside Information and the Holding of Securities and Securities Transactions, and Reporting Misconduct (see below).

All documents referred to in this paragraph are published on www.schiphol.nl under 'Schiphol Group, Investor Relations'.

Management Board

Schiphol Group's Management Board consists of four members, a President and Chief Executive Officer (CEO), a Chief Financial Officer (CFO), a Chief Operational Officer (COO) and a Chief Commercial Officer (CCO). They are jointly responsible for the management and general affairs of Schiphol Group. Notwithstanding the foregoing, each Management Board member accepted responsibility for a particular area.

As from 1 March 2019, the portfolio allocation within the Management Board has been adapted. The portfolio of Mr Benschop has been expanded to include innovation. Ms Van der Meijs is responsible for International, which is a new department. Ms Otto's portfolio now also includes Consumer Products & Services, and Digital. Mr Van den Berg is responsible for all activities related to large projects and IT.

Supervisory Board

The Supervisory Board is entrusted with the supervision of Schiphol Group's management and general affairs. In addition, it supports the Management Board with its advice. The Supervisory Board consists of at least five, and at most eight, members and meets at least four times a year.

The Supervisory Board has four permanent committees:

  • The Audit Committee informs the Supervisory Board's decision-making in respect of the internal risk management and control systems, and the integrity and quality of the financial reporting.
  • The Capital Programme, Operations & Investments Committee prepares the Supervisory Board's decision-making in respect of the investment programme which involves (inter alia) a new pier, terminal and related infrastructure (the Capital Programme) and operations and investments in general.
  • The People Committee prepares the Supervisory Board's decision-making in respect of nomination, appointment and remuneration.
  • The Safety, Sustainability & Stakeholders Committee prepares the Supervisory Board's decision-making in respect of safety, sustainability and stakeholder-related matters.

The duties and internal proceedings of each of these permanent committees are set out in charters which are part of the Supervisory Board rules that are published on www.schiphol.nl under 'Schiphol Group, Investor Relations'.

Mr Arkwright is not classified as independent within the meaning of best practice provision 2.1.8 of the Corporate Governance Code in his position of Deputy CEO of Groupe ADP. As the other Supervisory Board members are independent, Schiphol Group complies with best practice provision 2.1.7 of the Corporate Governance Code, which allows a maximum of two Supervisory Board members to be exempt from the independence requirement. Schiphol Group explicitly agreed with Mr Arkwright that he shall not participate in any discussions and decision-making regarding Groupe ADP.

Securities transactions

Even though Schiphol Group shares are not listed on a stock exchange, Schiphol Group has regulations governing Inside Information and the Holding of Securities and Securities Transactions, as it issued bonds under the EMTN Programme.

Members of the Management Board and Supervisory Board must refrain from buying and selling these bonds and/or any shares in Groupe ADP and Air France-KLM. Mr Nijhuis (President & CEO until 1 June 2018) and Ms Van der Meijs hold board positions at Groupe ADP. In that capacity, they are under an obligation to hold at least one share in the capital of Groupe ADP. The Company Secretary is the central officer referred to in the regulations governing Inside Information and the Holding of Securities and Securities Transactions. Mr Nijhuis will transfer his board position at Groupe ADP to Mr Benschop in March 2019.

Corporate responsibility (CR)

Governance

The President and CEO of Schiphol Group is primarily responsible for CR. The Management Board defines the CR vision and policy and is for that purpose assisted by the Supervisory Board's Safety, Sustainability & Stakeholders Committee. The CR programme manager is part of Schiphol Group's Corporate Development department and reports directly to the President and CEO in order to enable Schiphol Group to effectively integrate CR throughout the company and to ensure its impact on strategy. The achievement of CR targets is one of the elements of the remuneration policy for the Management Board.

Corporate Governance Structure

The COO acts as the airport manager and is in that capacity responsible for ensuring that applicable legislation, in particular relating to safety and environment, is complied with. Such legislation is often airport specific.

Sustainability

With the material aspects of regional significance, accessibility, noise levels, community engagement, CO2 emissions, air quality, raw materials and residual flows, contracting practices, supply chain responsibility and employment practices, we have the ambition to become the most sustainable airport operator in the world, while paying particular attention to four key topics: (1) sustainable aviation, (2) zero-emissions, (3) zero-waste, and (4) wellbeing. We collaborate with partners on these themes and we have defined two longterm goals: ensuring the airports operated by Schiphol Group are zero-waste and zero-emissions by 2030.

Each quarter, the Management Board discusses sustainability developments in general. Senior management of the departments that have the most impact regularly discuss these themes to ensure fulfilment of sustainability ambitions that transcend the individual department, as an integrated approach guarantees optimal coordination. Workshops regarding sustainability are regularly scheduled throughout the company to create awareness. In addition, a Circular Economy Taskforce has been set up to accelerate the transition to a circular economy.

Sustainability is a fixed component in Schiphol Group's investment strategy. As a matter of principle, sustainability is, to the extent possible, a selection criterion in Schiphol Group's tender processes.

Safety and environmental risk control

Schiphol Group's objectives, tasks, responsibilities, authorisations and working agreements regarding safety control and environmental risks are implemented in safety management systems. Monitoring health safety and environment (HSE) performance within the departments takes place via the relevant line organisation. A central HSE office was set up in 2017 to assist the line managers and to ensure a strong, uniform HSE organisation within Schiphol Group.

The COO and relevant senior management are represented in a Safety Review Board (SRB). The SRB aims to sharpen the focus on strategic objectives of safety performance at the airport and to comply with European Aviation Safety Agency (EASA) requirements. The SRB manages key safety risks, shares safety and environmental dilemmas and monitors the development of safety culture within Schiphol through the Schiphol4Safety programme.

Partly in response to recent recommendations of the Dutch Safety Board (Onderzoeksraad voor de Veiligheid), the Integral Safety Management System (ISMS), a sector-driven initiative to improve safety at Amsterdam Airport Schiphol, has been established. The purpose of the ISMS is to identify, monitor, analyse and mitigate safety risks that affect more than one industry party. The results are then linked to the existing individual Safety Management Systems. The ISMS works in close cooperation with the Civil Aviation Incident Analysis Department (ABL) of the Human Environment and Transport Inspectorate. On 30 October 2018, the ISMS published an online roadmap for safety improvement at www.integralsafetyschiphol.nl.

In 2017, Schiphol Group refined its internal rules (the Schiphol Rules) in order to further improve safety on the airport grounds. The Schiphol Rules are published on the airport's website. All persons at the airport must comply with the Schiphol Rules. Schiphol Group's COO supervises compliance with the Schiphol Rules and can impose sanctions if necessary.

Compliance with legislation

Schiphol has a public-private partnership with four government bodies (Human Environment and Transport Directorate, Rijnland Water Board, the municipality of Haarlemmermeer and the Royal Netherlands Marechaussee) concerning inspections and supervisory tasks in the area of safety and environmental legislation. This covers activities such as monitoring threats to aviation safety, inspecting the use of APUs (auxiliary power units), supervising ground-handling activities and monitoring airside traffic safety. Mutual obligations have been laid down in nine sub-covenants.

Schiphol also monitors compliance with environmental laws by the 350 companies covered by its environmental permit, in line with its licence to operate. With this system-based monitoring approach, Schiphol was the first company in the province of North-Holland to achieve the maximum level of performance designated by the Environment Agency for the Noordzeekanaal Area. Schiphol has set up the Schiphol Airport Authority organisation (SAA) for monitoring and enforcement operations.

Maintaining compliance with the European aviation safety rules laid down by EASA requires continuous attention. Moreover, as the competent authority, the Human Environment and Transport Inspectorate (ILT) of the Ministry of Infrastructure and Water Management (I&W) monitors and tests compliance.

EASA requires airports to take on a different role: Schiphol will have to assume greater responsibility for ensuring that the parties operating on airside comply with laws and regulations and with the further requirements imposed by the airport itself. It is essential that they can provide sound, demonstrable assurance that such is the case. For this reason, EASA requires an independent desk for safety-related issues. In order to comply with this requirement, the Schiphol safety organisation was reviewed in 2017 and the HSE Office was set up.

ACM Commitments

In February 2018, the Authority for Consumers and Markets (ACM) formally accepted the commitments offered by Schiphol and KLM to eliminate competition risks. These commitments aim to ensure a level playing field for competitors at Schiphol. As part of the agreement, Schiphol and KLM will not discuss the positions of other airlines, and Schiphol will independently develop its own plans regarding our investments, charges, and marketing strategy.

We have secured the commitments in a separate compliance programme, which is part of Royal Schiphol Group’s wider compliance programme, Mind Your Step. All relevant departments have been informed and awareness training will continue to take place over 2019.

Tabel responsibilities material aspects1

Material aspect

Final
responsibility

Challenges

Efforts to meet challenges included in

9

Network of destinations

CCO

Competition from other airports

Network of destinations

V

Airport capacity

COO

Maintain operations during construction
Development of Lelystad Airport

Airport capacity

P

Accessibility

COO

Improve accessibility by road and rail

Accessibility

l

Safety & Security

COO

Development of HRO culture

More stringent security requirements

Safety

Security

k

Regional significance

CEO

Maintain Mainport position
Continue our intensive dialogue with stakeholders

Regional significance

J

Digital

CEO

Make optimum use of the fast-growing digital potential

Digital

h

Customer appreciation

CCO

Maintain and enhance quality perception (despite construction and renovation)

Customer appreciation

b

Noise

CEO

Agreements on development post-2020 in Schiphol Local Community Council

Noise

N

CO2 emissions

COO

Development into zero emissions airport in 2030

Initiatives in the chain promoting innovation and sustainability

CO2 emissions

i

Air quality

COO

Initiatives in the chain promoting innovation and sustainability
Research/developments in fine and ultra-fine particles

Air quality

g

Supply chain responsibility

CFO

Exerting influence across the entire chain

Supply chain responsibility

n

Raw materials and residual flows

CCO

Development into zero waste airport by 2030

Raw materials and residual flows

L

Community engagement

CEO

Strengthen support for sustainable development

Community engagement

d

Financial solidity

CFO

Maintain good credit ratings

Financial solidity

j

Contracting practices

CFO

Effective and professional contracting practices under high pressure of time

Contracting practices

K

Integrity

CFO

Compliance and promotion of integrity within own organisation

Integrity

p

Employment practices

CEO

Development of HPO culture

Inclusive business practice

Employment practices

  • This overview is not exhaustive.
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A policy that aims
to attract and retain
qualified directors