Corporate Governance


Koninklijke DSM N.V. (Royal DSM) is a company limited by shares listed on Euronext Amsterdam, managed by a Managing Board together with an Executive Committee and with an independent Supervisory Board. Members of the Managing Board and the Supervisory Board are appointed (and, if necessary, dismissed) by the General Meeting of Shareholders.

The company is governed by Dutch law and by its Articles of Association, which can be consulted on the company website. The General Meeting of Shareholders decides on an amendment to the Articles of Association by an absolute majority of the votes cast. A decision to amend the Articles of Association may only be taken at the proposal of the Managing Board, subject to approval of the Supervisory Board.

DSM fully informs its stakeholders about its corporate objectives, the way the company is managed and the company's performance. Its aim in doing so is to pursue an open dialogue with its shareholders and other stakeholders.

DSM has a decentralized organizational structure built around business groups that are empowered to carry out all short-term and long-term business functions. In 2015, DSM announced a number of adjustments to its organizational structure related in particular to its support and corporate functions as well as its regional organizations. The new organizational and operating model has created more clarity between businesses, regions and support and corporate functions. At the operational level, the business groups remain the cornerstones of the organization.

Managing Board & Executive Committee

Since 2015, DSM’s management structure has been strengthened by the establishment of an Executive Committee. The Executive Committee enables faster strategic alignment and operational execution by increasing focus on the development of the business, innovation and people. The members of the Executive Committee are the Managing Board members as well as four senior managers appointed by the Chairman of the Managing Board after consultation with the Supervisory Board. The Executive Committee focuses on topics such as the overall strategy and direction, review of business results, functional and regional strategies, budget setting, and people and organization.

The statutory responsibilities of the Managing Board have remained unchanged. The Managing Board is ultimately responsible for the company's strategy, its portfolio management, the deployment of human and capital resources, the company’s risk management system, the company's financial performance and its performance in the area of sustainability.

The Managing Board consists of three or more members, to be determined by the Supervisory Board. The current composition of the Managing Board can be found in the chapter Supervisory Board and Managing Board Royal DSM. Since 2005, members of the Managing Board have been appointed for a period of four years.

The members of the Managing Board are collectively responsible for the management of the company. Notwithstanding their collective responsibility within the Managing Board, certain tasks and responsibilities for business clusters and functional areas as well as regional responsibilities have been assigned to individual members. This distribution of tasks is published on the company website.

The remuneration of the members of the Managing Board is determined by the Supervisory Board based on the remuneration policy approved by the General Meeting of Shareholders. The remuneration policy for the Managing Board can be found in the 'Report by the Supervisory Board' under Remuneration policy for the Managing Board.

The functioning of and decision making within the Managing Board and Executive Committee are governed by the Regulations of the Managing Board, which are in accordance with the Dutch corporate governance code and can be found on the company website.

In 2016, the Managing Board had 18 formal meetings and 35 Executive Committee meetings, some of them by teleconference. No Managing Board members had to be excused from meetings during the year. In 10 Executive Committee meetings, a member was excused due to other commitments. In all cases, members who were unable to attend provided any input they had to the meeting in advance in writing or via other members.

Supervisory Board

The Supervisory Board consists of at least five members. The current composition of the Supervisory Board can be found in the chapter Supervisory Board and Managing Board Royal DSM. Members of the Supervisory Board are appointed for a period of four years with a current maximum of three four-year terms.

All current members of the Supervisory Board are independent in accordance with the Dutch corporate governance code. The remuneration of the members of the Supervisory Board is determined by the General Meeting of Shareholders. The functioning of and decision making within the Supervisory Board are governed by the Regulations of the Supervisory Board, which are in accordance with the Dutch corporate governance code and can be found on the company website.

The Supervisory Board supervises the policy pursued by the Managing Board, the Managing Board's performance of its managerial duties and the company's general course of affairs, taking the interests of all the company's stakeholders into account. The annual financial statements are approved by the Supervisory Board and then submitted for adoption to the Annual General Meeting of Shareholders, accompanied by an explanation by the Supervisory Board of how it carried out its supervisory duties during the year concerned.

In line with the Dutch corporate governance code, the Supervisory Board has established from among its members an Audit Committee, a Nomination Committee, and a Remuneration Committee, besides which there is also a Sustainability Committee.

The task of these committees is to prepare the decision making of the Supervisory Board. These committees are governed by charters that have been drawn up in line with the Dutch corporate governance code and can be found on the company website.


DSM strongly values diversity and endeavors to reflect this in its Board memberships. Given the relatively small number of Managing Board members, the composition of the Managing Board in 2016, with one female and three male members, came very close to the 30% prescribed by Dutch legislation, requiring a large company to strive to achieve a balanced composition of its Boards in terms of gender, to the effect that at least 30% of the positions are held by women and at least 30% by men. The current composition of the Supervisory Board is well balanced, in terms of both gender and nationalities, and is in line with Dutch legislation in this regard. More than one third of the members are women (of the seven Supervisory Board members, three are female and four are male). Furthermore, in the Supervisory Board of DSM Nederland B.V., a subsidiary of Royal DSM, one of the three members is female.

General Meeting of Shareholders

The main powers of the General Meeting of Shareholders relate to:

  • the appointment, suspension and dismissal of members of the Managing Board and the Supervisory Board;
  • approval of the remuneration policy of the Managing Board;
  • approval of the remuneration of the Supervisory Board;
  • the adoption of the annual financial statements and declaration of dividends;
  • release from liability of the members of the Managing Board and the Supervisory Board;
  • issuance of shares or rights to shares, restriction or exclusion of pre-emptive rights of shareholders and repurchase or cancellation of shares;
  • amendments to the Articles of Association; and
  • decisions of the Managing Board that would entail a significant change in the identity or character of DSM or its business.

The Annual General Meeting of Shareholders is held within six months of the end of the financial year in order to discuss and, if applicable, approve the annual report, the annual accounts, any appointments of members of the Managing Board and the Supervisory Board, and any of the other topics mentioned above.

The Annual General Meeting of Shareholders and, if necessary, other General Meetings of Shareholders are called by the Managing Board or the Supervisory Board. The agenda and explanatory notes are published on the company website.

According to the Articles of Association, shareholders who, individually or jointly, represent at least 1% of the issued capital have the right to request to the Managing Board or the Supervisory Board that items be placed on the agenda. Such requests need to be received in writing by the Chairman of the Managing Board or the Supervisory Board at least 60 days before the date of the Annual General Meeting of Shareholders.

The Annual General Meeting of Shareholders was held on 29 April 2016. The agenda was to a large extent similar to that of previous years. Additional topics were the appointment of Pradeep Pant and the reappointments of Eileen Kennedy and Victoria Haynes as members of the Supervisory Board. One agenda item relating to an amendment of the Articles of Association was withdrawn prior to the meeting. Further details can be found on the company website.

Dutch corporate governance code

DSM supports the Dutch corporate governance code adopted in 2003 and amended in 2008, which can be found on DSM confirms that it applies all of the 113 Best Practices contained therein.

In 2016, the Monitoring Committee worked on an update to the Dutch corporate governance code, which was published on 8 December 2016 and will be applicable as of financial year 2017. DSM will ensure its continued compliance with the Dutch corporate governance code.

With respect to the appointment of members of the Managing Board for a period of at most four years (Best Practice II.1.1) it should be noted that DSM has adhered to this Best Practice since the introduction of the corporate governance code in 2004.

Since DSM respects agreements made before the introduction of said code, the current Chairman of the Managing Board will remain appointed for an indefinite period.

Any substantial change in the corporate governance structure of the company and in the company's compliance with the code shall be submitted to the General Meeting of Shareholders for discussion under a separate agenda item.

All documents related to the implementation of the Dutch corporate governance code at DSM can be found in the 'Corporate Governance' section of the company website.

Governance framework

Organizational & operating model

Business groups are the main building blocks of DSM’s organization; they have integral long-term and short-term business responsibility and have at their disposal all functions that are crucial to their business success. As the primary organizational and entrepreneurial building blocks, they focus on four primary business functions: Innovation and R&D, Direct Sourcing, Manufacturing & Operations and Marketing & Sales. Intra-company product supplies are contracted by the business groups on an arm's length basis.

The business groups are grouped into clusters, thus ensuring coherence of operations and the leveraging of resources within the cluster. The clusters are the main organizational entities for external strategic and financial reporting. This structure ensures a flexible, efficient and fast response to market changes. In order to ensure sufficient independence with regard to financial management, the Chief Financial Officer (CFO) has no business groups reporting to her.

DSM’s business groups receive services from global support functions and functional excellence departments and are supported by the regional organizations. This set-up enables DSM to create a global high-performing organization focused on meeting its targets and ambitions. The support functions and functional excellence departments are paid for the services they supply by the users, which are for the largest part the business groups and to a lesser extent other DSM units. Corporate departments are paid from a corporate budget.

Support functions provide those services that can be delivered more efficiently (in terms of total cost of ownership for DSM) by leveraging them across the company, thus capturing scale-benefits and delivering higher quality at lower cost, rather than having them arranged in each business group separately. Within support functions, centers of expertise provide specialist support, while shared service centers provide standard transactional support. Business partnering is the concept that acts as the interface between the business groups and the support functions. Business partners consequently have a second reporting line in the business. In order to ensure that the functional policies sufficiently reflect regional requirements, the support functions work closely with the regional organizations and integrate their advice. Each support function reports to a Managing Board member. There are support functions in the areas of Finance, People & Organization, Legal, Indirect Sourcing, Communications and IT. In the new operating model, corporate functions (small, high-level groups) supporting the Managing Board and Executive Committee are also seen as support functions. Corporate departments are Corporate Strategy & Acquisitions, Corporate Operational Audit, Corporate Risk Management, Corporate Sustainability, Corporate Investor Relations and Corporate Affairs.

Functional excellence departments are mandated by the Managing Board to help the businesses to achieve excellence. They cover the areas of Operations & Responsible Care, Marketing & Sales and Science & Technology. Functional excellence departments support businesses in improving their performance and provide guidance in setting aspiration levels and targets.

Governance framework

The following figure depicts DSM's overall governance framework and the most important governance elements and regulations at each level.


For the sake of clarity, a short summary of the main aspects of the framework at Managing Board/corporate level and operational level is given here:

  • The Managing Board and Executive Committee adhere to the Regulations of the Managing Board.
  • The Managing Board and Executive Committee work according to the Management Framework for the corporate level. This implies among other things that they adhere to the DSM Code of Business Conduct and applicable corporate policies and requirements. The Management Framework for the corporate level further provides a description of the most important (decision making) processes, responsibilities and 'rules of the game' at the Managing Board and Executive Committee, functional and regional levels and includes the governance relations with the next-higher levels (Supervisory Board and shareholders) and the operational units.

The company’s strategic direction and objectives are set in a Corporate Strategy Dialogue. The outcome of the most recent Corporate Strategy Dialogue was presented in November 2015 and is described in detail in DSM’s Integrated Annual Report 2015 and on the company website.

The operational units conduct their business within the parameters of the Management Framework for operational units. This implies among other things that they:

  • comply with the DSM Code of Business Conduct, Corporate Requirements and Directives;
  • establish the strategy, objectives and operational targets of their business according to the Business Strategy Dialogue, aligned with the Corporate Strategy Dialogue, and in which various scenarios and related risk profiles are investigated, and report on the achievement thereof;
  • implement risk management actions according to an Annual Risk Management Plan and in line with corporate policies;
  • execute DSM-wide standards for support functions (systems, processes, vendors, etc.); and
  • execute the annual functional improvement plans, and monitor the effectiveness of the risk management and internal control system and regularly discuss the findings with the Managing Board and Executive Committee.

The frequency of auditing the operational units is based on the risk profile of the respective unit; on average this happens once every three to four years and is conducted by the Corporate Operational Audit (COA) department. The director of COA reports to the CFO and has access to the Chairman of the Managing Board, the external auditor and the Chairman of the Audit Committee of the Supervisory Board. Furthermore, the director of COA acts as the compliance officer with regard to inside information and is the secretary of the Disclosure Committee, as well as being chairman of the DSM Alert Committee, which is responsible for the DSM whistleblower policy, systems and processes. Chaired by the CFO, the Disclosure Committee ensures the timely and accurate disclosure of share price sensitive information related to the Company and is responsible among other things for the implementation of the DSM rules on the holding and execution of transactions in DSM financial instruments. In the Fraud Committee, relevant corporate functions participate under the chairmanship of the CFO. The objective of the committee is to ensure structural follow-up of fraud cases with the aim of reducing fraud risks.

Sustainability Governance Framework

Managing Board

Sustainability falls under the responsibility of the Managing Board. While CEO/Chairman of the Managing Board Feike Sijbesma is the primary point of contact, other members also chair sustainability topics and initiatives. In 2016:

  • Feike Sijbesma oversaw sustainability as a key responsibility and company value as well as a business growth driver. He also oversaw DSM’s engagement with organizations including the United Nations and the World Bank, and the strategic partnership with the World Economic Forum;
  • Stephan Tanda was responsible for Safety, Health and Environment (SHE), and chaired the Inclusion & Diversity Council. He was the primary contact for DSM’s partnership with the UN World Food Programme and other nutrition-related initiatives;
  • Geraldine Matchett took care of integrating sustainability into financial decision making and represented DSM in the Accounting for Sustainability (A4S) CFO Leadership Network; and
  • Dimitri de Vreeze oversaw DSM's Supplier Sustainability Program and the sourcing of electricity from renewable sources in his responsibility for the Sourcing function.

Supervisory Board

DSM’s Supervisory Board has appointed its own Sustainability Committee to oversee progress against targets and report on the embedding of sustainability across the organization. For more details see Supervisory Board report.

External Sustainability Advisory Board

Comprising a diverse international group of thought leaders, DSM’s Sustainability Advisory Board acts as a sparring partner for the Managing Board and senior executives, to help sharpen their focus on strategic issues, deepen their understanding of external stakeholder needs, conduct advocacy and handle dilemmas. This board met twice in 2016 together with the Managing Board and a number of senior executives. Subjects discussed included DSM's corporate sustainability strategy, new business opportunities, sustainability and finance, sustainable animal proteins, and social innovation in Africa. The outcomes from such discussions led to recommendations and potential changes to DSM’s approach to its strategy and management of topics. This board also took the opportunity to host, together with members of the Managing Board, a round table with a number of DSM’s young professionals to discuss the topic: “The world with a climate deal: what has changed and what not?” They also joined DSM staff to celebrate being once again named worldwide sustainability leader in the Materials industry group in the Dow Jones Sustainability World Index. During the year, DSM welcomed new members Ndidi Nwuneli and Jessica Fanzo to this board; a further member, Robin Chase, joined in January 2017. Sadly, Sustainability Advisory Board member Pamela Hartigan passed away in August. Pamela brought clear and insightful perspectives on social entrepreneurship and social innovation, and will be dearly missed.

Sustainability Advisory Board

Robin Chase (f)1
Co-founder and former CEO of Zipcar, co-founder and board member of Veniam, board member of the World Resources Institute, and Tucows, and serves as an advisor to the French National Digital Agency and the USDOT’s Advisory Committee on Automated Transportation. Nationality: American.
Jessica Fanzo (f)
Bloomberg Distinguished Associate Professor of Ethics and Global Food & Agriculture at the Johns Hopkins Berman Institute of Bioethics, the School of Advanced International Studies (SAIS), and the Bloomberg School of Public Health, Department of International Health, and Director of the Global Food Ethics and Policy Program (all based in the US). She has previously held positions in nutrition advisory, advocacy and research organizations in the US, Italy and Kenya. Nationality: American.
Paul Gilding (m)
Independent writer and corporate advisor on sustainability. Fellow at University of Cambridge Institute for Sustainability Leadership (UK). In 2011 he published his book “The Great Disruption”. In the 1990s, he was executive director of Greenpeace International. Nationality: Australian.
David King (m)
Special representative for climate change of the UK government since 2013. From 2008 to 2012, he served as the founding director of the Smith School of Enterprise and the Environment at the University of Oxford (UK). Chief Scientific Advisor to the UK government 2000-2007. Nationality: British.
Ndidi Nwuneli (f)
Social entrepreneur and Founder of LEAP Africa and co-founder of AACE Food Processing & Distribution Ltd. (AACE Foods), an indigenous agro-processing company in Lagos (Nigeria). She is also a partner at Sahel Capital, an advisory and private equity firm focused on the agribusiness and manufacturing sectors in West Africa. Nationality: Nigerian.
Ye Qi (m)
Cheung Kong professor of Environmental Policy and director of Brooking-Tsinghua Center for Public Policy at Tsinghua University in Beijing (China). Before he joined Tsinghua, he taught at Beijing Normal University, and the University of California at Berkeley (California, USA). Nationality: American.

1 Joined January 2017

Global network

At a corporate level, sustainability is steered by the Sustainability Leadership Team, a group of senior executives representing the business groups and contributing corporate functions, which is chaired by the Vice President Sustainability. He leads the Corporate Sustainability department and reports directly to CEO Feike Sijbesma. The aim of the Corporate Sustainability staff is to be a business-oriented center of excellence and partner on sustainability, internally and externally.

The Sustainability Leadership Team meets quarterly to monitor the progress of sustainability across the company, with particular emphasis on steering the company’s business and innovation portfolio on key drivers. Regional operational sustainability networks are in place in China, India, Latin America, and North America.

The DSM Operations & Responsible Care department is responsible for all corporate issues related to SHE. The Senior Vice President DSM Operations & Responsible Care reports directly to the Managing Board. SHE managers provide support at business group level. The DSM SHE Council, which includes all business group SHE managers, is instrumental in sharing experiences and developing practices and communications on SHE issues.