The Fortis Board of Directors operates within the framework defined by Belgian and Dutch legislation, normal practice in the two countries and the Articles of Association. The role and responsibilities of the Board of Directors and its composition, structure and organisation are described in detail in the Fortis Governance Statement. That document also includes the independence criteria applying to non-executive members of the Fortis Board.
Composition
Jan Slechte stepped down as non-executive director at the end of the Annual General Meetings of Shareholders of 23 May 2007, having reached the retirement age set by the Board. Jan Slechte had been a Fortis Board Member since 1996, joined the (then) Compensation and Nominating Committee in 2001 and became Vice-Chairman of the Board in 2002. Throughout the years his wealth of international business and management experience has been a great asset to Fortis and to the Board. He has many times played a crucial role in the reaching of consensus by the Board. We are grateful for his invaluable contribution to Fortis’s development and to the Board’s activities.
The Annual General Meetings of Shareholders of 23 May 2007 re-elected Baron Philippe Bodson, Jan-Michiel Hessels and Ronald Sandler as non-executive directors for a term of three years, until the end of the Annual General Meetings of Shareholders in 2010. The meeting also approved the reappointment of Baron Piet Van Waeyenberge as non-executive director for a period of one year, until the end of the Annual General Meetings of Shareholders in 2008, thereby making an exception to the rule that nobody should serve as director for more than 12 years. Piet Van Waeyenberge will reach the age limit in 2008, so is no longer eligible for re-election. He joined Fortis as a director in 1988. Since then, the Board has benefited greatly from his extensive business and management experience in Fortis’s home markets.
Herman Verwilst was elected executive director for a period of three years, until the end of the Annual General Meetings of Shareholders of 2010.
Since 24 May 2007, the Board has consequently comprised 12 non-executive and two executive members – the Chief Executive Officer and the Deputy Chief Executive Officer.
The Board of Directors elected Jan-Michiel Hessels Vice-Chairman on 20 September 2007, as successor to Jan Slechte in that capacity.
On 7 November 2007, the Board of Directors decided to propose to the Annual General Meetings of Shareholders to be held on 29 April 2008 that Jean-Paul Votron be re-elected as executive director and Jacques Manardo and Rana Talwar as non-executive directors for a three-year term, i.e. until the end of the Annual General Meetings of Shareholders in 2011. Considering the specific context created by the ABN AMRO transaction, the Board of Directors judged it in the interests of Fortis that Count Maurice Lippens remain Chairman of the Board of Directors. The Board therefore wishes to depart from the rule that nobody can sit on the Board for more than 12 years. The Board also considers that this exception does not affect the independence of Maurice Lippens. In order to avoid the Chairman and CEO serving overlapping terms, the Board proposed the re-election of Maurice Lippens as non-executive director for a four-year term, until the end of the Annual General Meetings of Shareholders in 2012.
Lastly, it was disclosed at the time of the announcement of the agreement with Ping An that, in line with the strategy to grow outside the Benelux region, and with a view to deepening understanding of the increasingly important Asian markets, Louis Cheung Chi Yan, Executive Director and Group President of Ping An, will be put forward as non-executive director to the Annual General Meetings of Shareholders to be held on 29 April 2008.
Meetings
The Board of Directors met on 21 occasions in 2007, more frequently than usual due to the ABN AMRO transaction. Eight of these meetings were regular ones, planned as part of the normal meeting schedule. Of these eight meetings, four lasted one full day and three lasted half a day, while the annual Board off-site meeting was for two and a half days. Attendance details can be found on page 80.
The regular meetings dealt with the following matters:
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the strategy pursued by Fortis as a whole and by each Fortis business
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strategies pursued by Human Resources, Technology, Operations & Process Services, and Facilities & Purchasing
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ongoing developments at each of the Fortis businesses
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the 2007 budget
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quarterly balance sheets and income statements, with additional information provided by the CFO and external auditors
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Fortis’s ownership structure and associated investor relations strategy
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the agreement with Ping An
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reports of Board committees following each of their meetings
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nomination of directors for appointment or re-election by the Annual General Meetings of Shareholders
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appointment of two new Executive Committee members
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the remuneration of non-executive Board members, the CEO and the Executive Committee members and the stock option plan for selected members of senior management and Fortis employees
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the economic and monetary environment
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regulatory and legislative developments in the Benelux countries and their impact on Fortis
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self-assessment of the Board of Directors
Remuneration
The remuneration of non-executive Board Members consists of a basic annual salary plus attendance fees for Board committee meetings. Non-executive Board Members do not receive any variable or profit-related incentives, option rights, shares or other fees. Total remuneration paid to non-executive Board Members in 2007 was EUR 2.0 million. Further details are provided in note 11 of the Financial Statements.
For executive Board Members, the Board mandate as such is not remunerated. Executive Board Members receive a remuneration linked to the executive functions they perform within Fortis, determined in accordance with the remuneration policy for Fortis Board Members and Executive Managers. Details of the remuneration paid to Jean-Paul Votron and Herman Verwilst, who were the only executives serving on the Board in 2007, are provided in note 11 of the Fortis Financial Statements.
One non-executive member of the Board of Directors holds options arising from his previous management position, while several Board Members hold Fortis shares. In accordance with Dutch and Belgian law and regulations, details and updates of stock options and shares held by all Board Members are reported to the Banking, Finance and Insurance Commission in Belgium and the Authority for the Financial Markets in the Netherlands. On 31 December 2007, members of the Board held a total of 1,073,365 shares and 530,204 stock options and 227,119 restricted shares.
See note 11 of the Fortis Financial Statements for a review of remuneration policy, actual remuneration of the Board Members and Fortis options and shareholdings held by Board Members.
