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Corporate governance statement
from Annual report 2021
by Aquafin
CORPORATE GOVERNANCE AT AQUAFIN
Aquafin’s Corporate Governance Charter defines the rules and principles based on which corporate governance is organised within the company. In line with the Belgian Corporate Governance Code originally published in 2004, the Board of Directors approved the first charter on 26 January 2006. Following the publication of the Belgian Corporate Governance Code in 2009 and general developments in the area of corporate governance, the charter has since been reviewed several times and adapted in line with the changes occurring, where necessary.
By resolution of the Extraordinary General Meeting of 8 December 2020, the company’s articles of association were brought into line with the requirements of the new Companies and Associations Code. The new Belgian Corporate Governance Code also came into force in 2020. The Board of Directors has revised the charter to bring it into line with the Belgian Corporate Governance Code 2020 and the new Companies and Associations Code. The Board of Directors approved this new charter on 22 January 2021.
The latest version of the charter is available at www.aquafin.be/en/corporate-governance-statement.
The latest composition of the Board of Directors can also be found on the website.
NOTES ON DEVIATIONS FROM THE CODE
Aquafin applies the provisions of the Belgian Corporate Governance Code. The provisions of the code are deviated from in certain cases, according to the specific requirements and characteristics of the company. Further details of the provisions of the Code with which the company does not comply are given below.
• 5.6 The term of the mandate should not exceed four years
Aquafin complies with the provisions of the articles of association, which stipulate that a mandate may be for a maximum of six years and is renewable.
• 7.6 Non-executive board members should receive part of their remuneration in the form of shares.
In view of Aquafin’s special situation in which all shares are held via Participatie maatschappij Vlaanderen by the Flemish Region, this rule is not followed.
• 7.9 The Board of Directors should set a minimum threshold of shares to be held by members of the executive management.
In view of the exception in point 7.6, this rule does not apply.
• 8.7 The Board of Directors should debate whether it would be appropriate for the company to enter into a relationship agreement with the significant or controlling shareholders.
In view of the exception in point 7.6, this rule does not apply.
• 8.8 and 8.9 Institutional investors.
In view of the exception in point 7.6, this rule does not apply.
KEY FEATURES OF THE COMPANY’S INTERNAL CONTROLS AND RISK MANAGEMENT SYSTEMS IN RELATION TO FINANCIAL REPORTING
The Board of Directors is responsible for approving and evaluating the existing systems of internal control and risk management.
Internal control environment
The Audit Committee plays a key role in the operation of the internal control system and in particular the financial reporting process. The tasks of the Audit Committee include:
• overseeing the integrity of the financial information; • evaluating the systems for internal control and risk management set up to ensure that the main risks (including the risks relating to conformity with existing legislation and regulations) are suitably identified, managed, and reported; • monitoring the activities of internal audit and the effectiveness and performance of the audit function; • monitoring the statutory audit of the annual accounts, including follow-up of recommendations made by the statutory auditor. • monitoring the accounting team responsible for recording income and expenses in the accounts and preparing the reports • monitoring the controlling team responsible for reviewing and declaring fluctuations (both timewise and with respect to the budget) • monitoring the Finance management team, together with the accounting team, responsible for the final review of the financial information and the preparation and presentation of the financial statements.
RISK MANAGEMENT
The management team is also aware of the importance of the good operation of the internal control system and risk management. Risk-related matters are a permanent item on the agenda and discussed at the weekly meetings.
A range of control measures are implemented in all departments as part of risk management. These control measures comprise policies, procedures, specified signing authorities, segregation of duties, built-in early warning indicators, management reporting, actual/budget comparison and so on.
New or amended legislation is noted and communicated. At the same time, the necessary steps are taken to comply with it. Processes and procedures are updated if necessary.
Since 2015 the company has held ISO 55001 certification. Inherent in this standard is management based on risks and opportunities. In this context, the risk matrix is an objective tool.
Critical performance indicators are defined, which are used as a measurement tool but also as a reporting system.
COMPOSITION AND FUNCTIONING OF THE MANAGEMENT BODIES AND COMMITTEES
Board of Directors
The company has adopted a single-tier structure, in which the company is governed by the Board of Directors. The Board of Directors is the company’s highest decision-making body and is authorised to perform all actions required or necessary to achieve the company’s objects, with the exception of those actions that are reserved for the General Meeting, by law or by the articles of association.
• Composition
The composition of the Board of Directors remained unchanged in 2021.
Aquafin’s board of directors comprises ten members appointed by the General Meeting. All members are non-executive directors. Nine directors are independent based on the criteria of Article 7:87(1) of the new Companies and Associations Code and provision 3.5 of the Belgian Corporate Governance Code 2020. The Board of Directors therefore complies with provision 3.4 of the Corporate Governance Code 2020, which states that at least three board members should be independent. The Board of Directors is assisted by the corporate projects director, as a temporary replacement for the head of legal, who acts as secretary. • Functioning
As well as exercising the powers defined in the charter, the Board of Directors once again paid close attention to the subjects of safety and well-being during the last financial year. During each meeting, the directors were informed of occupational accidents which had occurred in the period under review. Work continued towards setting up a long-term safety programme with the ultimate goal of zero occupational accidents. A new, stricter matrix for wearing Personal Protective Equipment was implemented and communication begun with a selection of main contractors regarding VCA/permits to work/rules around Personal Protective Equipment and basic instructions. The various long-term, annual and permanent objectives were also reviewed in order to realise Aquafin’s vision within the context of the corporate values and the policy around corporate social responsibility. The impact of the Flemish Coalition Agreement with the new coordinating role for Aquafin with respect to the sewer operators and municipalities was discussed further. It emerged from the negotiations around the new cooperation with the Flemish Environment Agency that the decree (the Water Code) needs to be amended. This will take place in 2022.
Name Type of directorship/Independent/ End of term (Non-)executive of office
Alain Bernard Non-independent, non-executive 2024 Marleen Evenepoel Independent, non-executive 2024 Koen Helsen Independent, non-executive 2024 Renaat De Sutter Independent, non-executive 2024 Jozef Wittouck Independent, non-executive 2024 Dirk Lybaert Independent, non-executive 2024 Jochen Bultinck Independent, non-executive 2024 Katrien Desomer Independent, non-executive 2024 Katrijn Faket Independent, non-executive 2024 Nathalie Heremans Independent, non-executive 2024
Board of directors - attendence Number of meetings Percentage
Jochen Bultinck 5
Katrien Desomer Renaat De Sutter Katrijn Faket Koen Helsen Alain Bernard Dirk Lybaert Jozef Wittouck
5 5 5 5 5 5 5 Marleen Evenepoel 5 Nathalie Heremans 5 100% 100% 100% 80% 100% 80% 100% 100% 80% 80%
The text of the new cooperation agreement is being finalised and will also come into effect in 2022.
The implementation of Aquafin’s long-term strategy for sludge treatment was also covered with plans for a full review of disposal by 2026. The Board of Directors had approved a strategy before focusing on recovery of raw materials and energy, which is also in keeping with the company’s energy policy: reducing the CO2 footprint through annual energy saving, phasing out and eventually ceasing the use of fossil fuels and producing (more) green energy. On 1 October, Aquafin’s first biomethane installation started up at the AntwerpenZuid WWTP.
Substantial investments in Aquafin’s digital capacity are necessary to ensure continuity and facilitate further digitalisation. These investments should enable Aquafin to record further efficiency gains in the coming years and ensure continuity. With the support of the Board of Directors, the finance aspect has been finalised and Aquafin has begun to implement the digital roadmap. In the meantime, the Minister has instructed the Flemish Environment Agency – in consultation with the various actors – to work out a long-term vision for the water industry. This matter will obviously be followed closely.
• Conflicts of interest
No conflicts of interest were reported in 2021. Audit Committee
• Composition
Chairman Jochen Bultinck Katrien Desomer Katrijn Faket Koen Helsen Nathalie Heremans
The committee has a balanced composition as a whole and possesses the necessary independence, competencies, knowledge and experience to perform its tasks effectively.
• Functioning
The main function of the Audit Committee is to assist the Board of Directors in the exercise of its mission of control, in the broadest sense. The tasks relate in particular to supervision of financial reporting, internal controls and risk management, the internal audit process and the external audit process. The Audit Committee is the main link between the Board of Directors, the internal auditor and the statutory auditor. The Chairman of the Audit Committee reports systematically on the activities of the Audit Committee at the next meeting of the Board of Directors. The annual report on the activities of the Audit Committee was presented to the Board of Directors. During the 2021 financial year, the Audit Committee also focused on the following matters in particular: • the financial reporting was discussed in depth at all meetings. At the March and September meetings respectively, the 2020 financial statements and the 2021 interim results were discussed, in the presence of the independent auditor. • preparation of the 2022 budget for presentation to the Board of Directors • evolution and results of management of interest rate risk, in particular the credit risk for Aquafin with regard to counterparties • the approval of the internal audit plan and monitoring of the
KPIs relating to the functioning of internal audit and followup by the management of the recommendations made by internal audit • the revision of the Internal Audit Charter
• discussion of the management letter from the independent auditor and supervision of the policy for non-audit services • the results of the assessment of the committee’s functioning • the security of the ICT systems with regard to cybersecurity.
• Number of meetings and attendance record
The Audit Committee met four times in 2021. Four of the five directors took part in all meetings, one director was absent from two meetings. This represents average attendance of 90%. The independent auditor, the General Manager, the Finance & Procurement director and the internal auditor attended all or part of the meetings.
Jochen Bultinck Katrien Desomer Katrijn Faket Koen Helsen Nathalie Heremans
Number of meetings Percentage
4 4 4 4 4 100% 100% 100% 100% 50%
Appointments and Remuneration Committee
The main task of the Appointments and Remuneration Committee is to assist the Board of Directors to define the outline of the Company’s remuneration policy. It also contributes to the objective and professional functioning of the process for appointing and re-appointing directors and the annual evaluation of the performance of the management team.
• Composition
Chairman Marleen Evenepoel Renaat De Sutter Dirk Lybaert Jozef Wittouck • Functioning
The Appointments and Remuneration Committee met twice during the past financial year. One director was absent from one meeting. All directors attended the other meetings. This represents average attendance of 90%. During the meetings in the past financial year, the objectives of the Management Committee for 2020 were reviewed. The committee then decided on the objectives for 2021. Besides the overall remuneration for 2021, the remuneration of the Management Committee was also discussed. In line with Aquafin’s vision, strategy and values, the committee endorsed the Aquafin Future Proof Skillset. The aim of this process is to attract the right colleagues for the future.
Renaat De Sutter Alain Bernard Dirk Lybaert Jozef Wittouck Marleen Evenepoel
Number of meetings Percentage
2 2 2 2 2 100% 100% 100% 100% 50%
Key elements of the evaluation process of the Board of Directors, the committees and the individual directors
The members of the Board of Directors evaluate the size, composition and functioning of this body on a regular basis, at least every three years. The current composition is evaluated in terms of the desired composition. The relationship and interaction with the management team are also reviewed.
The following elements are discussed during the evaluation process for the Audit Committee: internal regulations, composition and appointments, meetings, training of members and resources available for this, the integrity reporting procedure and relations with the Board of Directors. The Audit Committee evaluates its effectiveness and efficiency at least once every three years. As part of this evaluation, an individual questionnaire shall be issued to the members of the Audit Committee. The results of these questionnaires shall be discussed during a meeting of the Audit Committee and submitted to the Board of Directors.
The Appointments and Remuneration Committee evaluates its own effectiveness and efficiency at least once every three years. For the purpose of this self-evaluation, an individual questionnaire is sent to each member of the committee. The results are discussed at a meeting of the committee and submitted to the Board of Directors.
The Appointments and Remuneration Committee also contributes to the objective and professional functioning of the process for appointing and re-appointing directors and the annual evaluation of the performance of the management team.
Managementteam
• Composition
Following the adaptation of the articles of association to bring them into line with the new Companies and Associations Code, the Board of Directors has established an executive body, the management team. The management team consists of the General Manager, who leads the management team, and all other directors of the Company at a given time. The composition of the management team on 31/12/2021:
General Manager
Jan Goossens Asset Management Bart Van Eygen Finance & Procurement Glenn Van Olmen Process innovation Danny Baeten Project management Dirk De Waele Business Development Marjolein Weemaes & Innovation Operations Hans Bruynooghe HR & Organisational Sabine Schellens development Corporate projects Johan Maes (on an interim basis)
• Functioning
The management team exercises the powers relating to day-to-day management, and all transferable powers except for those powers reserved for the Board of Directors according to the statutory provisions, the company’s articles of association and the internal regulations of the Board of Directors. The management team meets on a weekly basis. Diversity policy
Aquafin aims for diversity in the Board of Directors and the management team. We interpret this more broadly than age, gender and cultural background, and also view diversity in terms of education, insights, experience and professional competencies.
Aquafin believes that diversity of perspectives within the management bodies contributes to the constructive puttingforward of views for discussion. It provides a broad range of perspectives, new ideas and critical considerations which are necessary to support the decision-making process effectively.
The Board of Directors ensures that each appointment or reappointment enables a suitable balance of competencies, knowledge, experience and diversity to be maintained in the board and the committees. As far as gender diversity is concerned, the Board of Directors aims to ensure balanced participation in the Board of Directors. The Board of Directors currently consists of ten members, four of them women.
Remuneration Report
• Non-executive directors
Aquafin applies the following remuneration model for directors: On the one hand, there is an annual flat fee for attending meetings of the Board of Directors. This flat fee stands at 6,500 euros for directors and 13,000 euros for the chairman. Payment of the fee is conditional on attending at least two thirds of the total number of meetings, barring force majeure. In addition, a fee is paid per meeting of the Audit Committee and the Appointments and Remuneration Committee amounting to 380 euros for the chairmen and 320 euros for the members of these committees.
Jochen Bultinck (V) Katrien Desomer Renaat De Sutter Katrijn Faket Koen Helsen Alain Bernard (V) Dirk Lybaert Jozef Wittouck Marleen Evenepoel (V) Nathalie Heremans
Total
((C) = Chairman)
Remuneration 01/01/2021 - AV 2021 Remuneration AV 2021 - 31/12/2021 Total remuneration 2021
2,380 2,320 2,320 2,320 2,320 4,320 2,320 2,320 2,380 2,320 25,320
5,640 5,460 4,820 5,460 5,460 9,320 4,820 4,820 4,500 4,820 55,120
8,020 7,780 7,140 7,780 7,780 13,640 7,140 7,140 6,880 7,140 80,440
• Management team
The total gross remuneration paid for 2021 to the members of the management team amounts to: • basic salary: 1,358,893.91 euros • variable part: 227,392 euros • pension entitlements: 269,212.71 euros • other remuneration components: 182,789.78 euros The variable remuneration for the 2021 financial year will be added to the group insurance in 2022. • General
Based on the advice of the Appointments and Remuneration Committee, the Board of Directors determines the remuneration policy for the executive management team. The aim of this policy is to attract, retain and motivate knowledgeable people. The amount of the remuneration shall take into account the individual tasks and responsibilities of the members of the management team. The performance of the management team is evaluated once a year in the presence of the General Manager. The appraisal of the General Manager takes place in his absence. The Appointments and Remuneration Committee closely monitors the entire procedure, which is also approved by the Board of Directors. Individual and collective objectives are set each year, based on the regulations. A certain weighting is assigned to each objective within the evaluation in advance. For 2021, the elements of the evaluation related to organisational, budgetary, economic and environmental aspects and/or results, among other factors. The overall performance of each member of the Managing Committee is also evaluated, in addition to the evaluation based on the objectives set. The period during which this performance is evaluated extends from 1 January 2021 to 31 December 2021 inclusive.
AQUAFIN NV
Colophon
Publisher: Jan Goossens, Dijkstraat 8 - 2630 Aartselaar Graphic design: altera Photography: Silke Van Rooy, Nicolas Herbots, Jonathan Ramael, Frederik Beyens, Shutterstock and Aquafin NV
The 2021 annual report is also available in Dutch.
Aquafin NV, Dijkstraat 8, B-2630 Aartselaar tel. 03 450 45 11 l whatsapp 0474 56 39 12 e-mail: info@aquafin.be l www.aquafin.be
