Supervisory Board

Composition

Until the AGM of 21 April 2009, the Supervisory Board consisted of five members, who are appointed by the General Meeting of Shareholders for a term of four years and can be reappointed for a maximum of two further terms of four years. Mr R. Zwartendijk is chairman. Mr L.J.A.M. Ligthart, vice-chairman of the Supervisory Board, reached the end of his third and final four-year term as a Supervisory Board member and stepped down as a Supervisory Board member at the AGM. At the same AGM, Mr R.J. Frohn and Mr A. Puri were appointed to the Supervisory Board for a renewable four-year term. Following his appointment, Mr R.J. Frohn was elected chairman of the Audit Committee and Mr A. Puri was elected chairman of the Innovation & Sustainability Committee. Mr J.M. de Jong was elected vice-chairman of the Supervisory Board. Mr Y. Barbieux and Mr J.A.J. Vink are members of the Supervisory Board.

Duties

The duties of the Supervisory Board are to supervise the management by the Executive Board, the effectiveness and integrity of the internal control and risk management systems and procedures put in place by the Executive Board and the general conduct of affairs within Nutreco and its businesses, and to assist the Executive Board with advice in accordance with the best practices of the Dutch Corporate Governance Code.

In addition, certain (material) decisions of the Executive Board, as specified in the law, in the Articles of Association and in the Supervisory Board rules, are also subject to the prior agreement of the Supervisory Board.

Rules

Since 1997, the Supervisory Board has used rules as a basis for its own functioning and for its relationship with the Executive Board. In view of the coming into force of the Code, these rules will be updated by the Supervisory Board. The rules are posted on Nutreco’s website (www.nutreco.com).

All Supervisory Board members independent and no conflicts of interest

All Supervisory Board members are independent from the Company within the meaning of best practice provision III.2.2 of the Code. None of the members is a member of the Executive Board of a Dutch listed company in which a member of the Executive Board of the Company is a Supervisory Board member. There are no interlocking directorships. None are or were in the past employed by Nutreco and/or represent directly or indirectly a shareholder of Nutreco or a supplier or customer of the Company. None of the members of the Supervisory Board provides any services to or has any direct or indirect ties with Nutreco outside his Supervisory Board membership.
Until June 2009, Mr L.J.A.M. Ligthart chaired the Supervisory Board of Nutreco Nederland B.V., a fully owned subsidiary of the Company. Mr M.S.J.H. Stevens was appointed to succeed Mr L.J.A.M. Ligthart as a Supervisory Board member of Nutreco Nederland B.V. and Mr W. Klaassen was appointed chairman of the Supervisory Board of Nutreco Nederland B.V. The Supervisory Board rules contain provisions with regard to potential conflicts of interest. In the year under review, no transactions with a potential conflict of interest took place.
The Code states as a best practice that all transactions between the Company and legal or natural persons who hold at least 10% of the shares in the Company shall be agreed under the conditions customary in this branch of industry. The Company has dealings with ING, which declared a 9.55% interest on 10 August 2007, and with ASR Nederland N.V., which declared a 6.56% interest on 6 October 2008.

ING is a member of the bank syndicate which granted a syndicated bank loan in 2009. As part of this syndicated bank loan, financial transactions took place throughout the year with several banks, including ING. Such transactions were carried out subject to conditions customary for such transactions in this branch of industry. ASR Nederland N.V. is one of the Company’s insurers.

Fixed remuneration – Shares in Nutreco

As provided in the Articles of Association, none of the Supervisory Board members receives a remuneration that is dependent on the financial performance of Nutreco. The Supervisory Board rules require members’ individual shareholdings in the Company to serve for the sole purpose of long-term investment only. With the exception of Mr Y. Barbieux, who held 504 shares (2008: 466 shares) in the Company as at 31 December 2009, none of the Supervisory Board members is holding any share or option rights to acquire shares in Nutreco.

Shares or other securities in Dutch listed companies other than Nutreco

The Supervisory Board rules contain regulations concerning ownership of and transactions in securities held by members of the Supervisory Board in Dutch listed companies other than Nutreco. Under the amended Code it is no longer required to notify any such transactions to the Company’s Compliance Officer.

No loans or guarantees to Supervisory Board members

As a matter of policy, Nutreco does not extend any loans or guarantees to the members of the Supervisory Board.

Profile

A profile setting out the desired expertise and background of the Supervisory Board members is part of the Supervisory Board rules and was used in the process of selecting Supervisory Board members. Two of the Supervisory Board’s current members can be regarded as financial experts within the meaning of best practice III.3.2.

Mr J.M. de Jong was a member of the Executive Board of ABN Amro Bank N.V. (Netherlands) and Mr R.J. Frohn was a member of the Executive Board and CFO of AkzoNobel until his appointment in 2008 as a member of the Executive Board responsible for AkzoNobel’s Specialty Chemicals business.

The Supervisory Board strives to achieve diversity in terms of expertise, nationality and gender. With the appointment of Mr R.J. Frohn, the vacancy left by the departure of Mr L.J.A.M. Ligthart as a financial expert and chairman of the Audit Committee was filled. The appointment of Mr A. Puri, a U.S. citizen, added expertise to the Supervisory Board in matters of innovation and sustainability. When selecting a new candidate for the Supervisory Board, due regard will be paid to achieving gender diversity.

Company Secretary

The Supervisory Board received support from Mr B. Verwilghen, Company Secretary, also Compliance Officer and Director of Legal Affairs and Insurance.

Audit Committee

The Supervisory Board resolved during the course of 2002 to appoint two of its members to act as the Supervisory Board’s Audit Committee. Mr L.J.A.M. Ligthart chaired the Audit Committee until the AGM of 21 April 2009, when he stepped down at the end of his final four-year term as a member and vice-chairman of the Supervisory Board. Following his appointment as a member of the Supervisory Board, Mr R.J. Frohn was appointed chairman of the Audit Committee. Mr J.A.J. Vink is a member.

The duties of the Audit Committee are to ascertain that the Company maintains adequate procedures and control systems to manage the financial, operational and IT-related risks to which the Company is exposed, to prevent fraud and to oversee the integrity of the Company’s financial reporting.

During the year under review, the Audit Committee met three times. All three meetings were attended by the internal auditor. In addition, a telephone conference was held to review the half-year results. All three meetings and the telephone conference were attended by the Company’s external auditor, KPMG Accountants N.V. At one of its meetings, the Audit Committee held an assessment of its own performance.

Details about the Audit Committee’s activities during the year under review are included in the report of the Supervisory Board.

Risk management

Please refer to the ‘Risk management’ paragraph on page 52 of this report.

Remuneration Committee

The Remuneration Committee consists of Mr J.M. de Jong (chairman), Mr R. Zwartendijk and Mr Y. Barbieux (members). The Remuneration Committee meets at least once a year with the CEO. The Remuneration Committee seeks advice from specialised advisers when deemed useful. The Remuneration Committee makes recommendations to the Supervisory Board.

The Supervisory Board has discretionary powers within the limits set by the remuneration policy (see below) as approved by the General Meeting of Shareholders to decide on the award of performance shares to members of the Executive Board and a number of executives and senior staff, and to decide on the continuation of the employee share participation scheme.

During the year under review, the Remuneration Committee held five meetings. Details about the Remuneration Committee’s activities during the year under review are included in the report of the Supervisory Board.

Selection and Appointment Committee

Since the introduction of the Corporate Governance Code, a separate Selection and Appointment Committee was installed consisting of the members of the Supervisory Board. The chairman of the Supervisory Board acts as chairman of the Selection and Appointment Committee. The Committee meets on an ad hoc basis and deliberated, during the year under review, on the termination of the employment agreement with  Mr J.B. Steinemann. The Committee discussed the proposal to appoint Mr K. Nesse, Executive Vice-President Aquaculture Division, Mr F.J. Tielens, Executive Vice-President Specialties Division, and Mr J.A. Vergeer, Executive Vice-President Agriculture Division, as members of the Executive Board and a delegation of the Committee interviewed the proposed candidates. Subsequently, these proposed appointments were approved by the General Meeting of Shareholders. The Committee noted the end-of-final-term resignation of Mr L.J.A.M. Ligthart at the AGM of 2009 and proposed to the General Meeting of Shareholders to appoint Mr R.J. Frohn and Mr A. Puri as new members of the Supervisory Board. In addition, the end-of-term resignation of Mr J.A.J. Vink was noted and the Committee proposed to reappoint Mr J.A.J. Vink for a new four-year term. Subsequently, these proposed appointments were approved by the General Meeting of Shareholders and Mr R.J. Frohn was appointed chairman of the Audit Committee, whereas Mr A. Puri was appointed chairman of the newly created Innovation & Sustainability Committee.

Innovation and Sustainability Committee

In September 2009 the Innovation and Sustainability Committee was installed. The Committee consists of Mr. A. Puri (chairman), Mr J.A.J. Vink and Mr Y. Barbieux (members). The focus areas of the Committee are the governance of research & development, feed-to-food safety and sustainability. During the year under review the Committee held two meetings. Details about the Innovation and Sustainability Committee’s activities in 2009 are included in the report of the Supervisory Board.

Remuneration of the Supervisory Board and its committees

No increase in the remuneration of the Supervisory Board of Nutreco Holding N.V. and its committees took place in 2009. The remuneration of the membership of the newly installed Innovation & Sustainability Committee is the same as that for the Remuneration Committee. The total remuneration of the members of the Supervisory Board amounted to EUR 322,250 (2008: EUR 274,000). For the individual remuneration, please refer to page 140 of the financial statements. These amounts are gross amounts per year. The remuneration of the Supervisory Board is reviewed once a year.

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