The Supervisory Board supervises the Board of Management, the Executive Committee and the general course of business of Philips, and advises the executive management thereon. In the two-tier corporate structure under Dutch law, the Supervisory Board is a separate body that is independent of the Board of Management. Its independent character is also reflected in the requirement that members of the Supervisory Board can be neither a member of the Board of Management nor an employee of the company.
The Supervisory Board, acting in the interests of Philips and taking into account the relevant interest of Philips’ stakeholders, supervises and advises the Board of Management and the Executive Committee in fulfilling their duties and setting the direction of the Group’s business, including (i) achievement of the company’s objectives, (ii) corporate strategy and the risks inherent in the business activities, (iii) the structure and operation of the internal risk management and control systems, (iv) the financial reporting process, and (v) compliance with legislation and regulations.
Major management decisions and Philips’ strategy are discussed with and approved by the Supervisory Board. In its report (as included in the company’s Annual Report), the Supervisory Board describes its activities in the financial year (and those of its committees), the number of meetings and the main items discussed.
The Rules of Procedure for the Supervisory Board include provisions regarding meetings, resolutions, committees, profile of the Supervisory Board, trading in securities and conflicts of interests.