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 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 any 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 an organizational structure built around business groups that are empowered to carry out all short-term and long-term business functions, in which activity they are assisted by support and corporate functions, as well as by regional organizations.

Managing Board and Executive Committee

Since 2015, DSM's management structure has been strengthened by the establishment of an Executive Committee. The Executive Committee was installed to enable 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 with respective responsibility for DSM Nutritional Products (Chris Goppelsroeder), Corporate Strategy & Acquisitions (Philip Eykerman), the DSM Innovation Center (Rob van Leen), and Group People & Organization (Peter Vrijsen, who was succeeded by Judith Wiese as of 1 January 2018). The latter four managers are appointed by the Chairman of the Managing Board after consultation with the Supervisory Board. The Executive Committee focuses on topics such as the company's 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 remain unchanged.

The Managing Board is ultimately responsible for the company's strategy, its portfolio management, the deployment of human capital and financial capital resources, the company's risk management system, the company's financial performance, and its performance in the area of sustainability. It is hence also the Managing Board that is accountable to the Supervisory Board for the company's strategy and management. To this end, the full Managing Board attends the Supervisory Board meetings, whereas the other Executive Committee members attend those (parts of) Supervisory Board meetings that are specifically relevant to their area of responsibility.

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 Managing Board. Since the introduction of the Dutch Corporate Governance Code in 2004, 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 Managing Board members 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' on Remuneration of Managing Board and Supervisory 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 2017, the Managing Board had nine formal meetings and 41 Executive Committee meetings, some of them by teleconference. No Managing Board member had to be excused from meetings during the year. In three 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 comprises 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 and may then be reappointed for a period of four years. A Supervisory Board member may then subsequently be reappointed for a period of two years, which appointment may be extended by at most two years. For reappointment after an eight-year period, reasons must be provided in the report of the Supervisory Board.

All current members of the Supervisory Board are independent in accordance with the Dutch Corporate Governance Code. The remuneration of the Supervisory Board members 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. Since the inception of an Executive Committee, the Supervisory Board has also had the responsibility to ensure that the checks and balances that are part of the two-tier system are still taken into account, paying specific attention to the dynamics between Managing Board and Executive Committee. The Supervisory Board is enabled to do so through the information provided to it by the Managing Board.

The annual financial statements are approved by the Supervisory Board and then submitted to the Annual General Meeting of Shareholders (AGM) for adoption, accompanied by an explanation by the Supervisory Board of how it carried out its supervisory duties during the year under review.

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. The Supervisory Board has drafted diversity policies for the Supervisory Board, the Managing Board and the Executive Committee. These policies strive for a balanced composition of the respective body, taking into account gender, age, knowledge, experience, and nationality / cultural background. In addition, for the composition of the Supervisory Board, the board tenure is taken into account. In terms of gender diversity, DSM strives for a composition of its Supervisory Board, Managing Board and Executive Committee, whereby at least 30% of the positions are held by women and at least 30% by men, which is in line with Dutch legislation. In order to ensure a balanced composition in terms of nationality / cultural background, DSM's aim is not to have more than 50% of the members of its Supervisory Board or Executive Committee representing one nationality. While a diverse composition in terms of nationality / cultural background is also taken into account in the composition of the Managing Board, no quantitative aim is set here, given the relatively small number of Managing Board members.

The diversity policies are implemented by applying them to nominations for (re)appointment of Supervisory Board and Managing Board members as well as to appointments of Executive Committee members. In 2017, two Supervisory Board members were appointed, strengthening the diversity within the Supervisory Board in terms of age, knowledge and experience. With the appointment of Frits van Paasschen, a member with a broad business background, including knowledge of disruptive business models and digital technology, was added. In view of Tom de Swaan stepping down at the 2018 AGM, the continuity of the financial and accounting experience and knowledge within the Supervisory Board was ensured with the appointment of John Ramsay. The same holds for the reappointment of Dimitri de Vreeze as member of the Managing Board: this ensured the diversity in experience and knowledge within the Managing Board, more specifically the continuity of experience and knowledge with respect to Materials. The diversity in terms of gender and nationality / cultural background in DSM's Executive Committee was strengthened with the appointment of Judith Wiese, who succeeded Peter Vrijsen as head of DSM's Group People & Organization as of 1 January 2018. All in all, both DSM's Supervisory Board and Managing Board were well balanced in 2017 in terms of gender, with 38% (rising to 43% after the 2018 AGM, with Tom de Swaan stepping down) and 33% women respectively, which is in line with Dutch legislation in this regard. With the appointment of Judith Wiese, the gender diversity within DSM's Executive Committee will rise to 29% women, coming very close to the target of 30% of the positions being held by women and at least 30% by men. The composition of both DSM's Supervisory Board and the Executive Committee are in line with the target of not having more than 50% of the members representing one nationality. 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 on ordinary shares;
  • 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 AGM is held within six months of the end of the financial year in order to discuss and, if applicable, adopt 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 AGM 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 General Meeting of Shareholders.

The AGM was held on 3 May 2017. The agenda was to a large extent similar to that of previous years. Additional topics were the appointment of John Ramsay and Frits van Paasschen as members of the Supervisory Board and the reappointment of Dimitri de Vreeze as member of the Managing Board. The Articles of Association were amended to reflect a change in the way the dividend percentage on the Cumulative Preference Shares A is calculated. Further details can be found on the company website.

Control effectiveness and continuity assumption

The 'Statements of the Managing Board' are reported on Statements of the Managing Board. These conform with the Dutch Corporate Governance Code best practice 1.4.3 on 'Board Statements'.

DSM House Supporting

DSM visualized its control environment as a 'house' that includes the internal control process areas with control measures related to the strategic, operational, compliance and reporting risks. The elements of COSO (the Committee of Sponsoring Organizations of the Treadway Commission) provide a framework for identifying the DSM activities that are executed to ensure the control environment is adequately structured. Finally, to ensure a learning curve is achieved, monitoring activities include sharing findings, experiences, and control measures across the supporting pillars.

DSM has a three lines of defense structure to manage risks, see also Risk management. Corporate Operational Audit (COA) is in the third line of defense. The scope and frequency of the COA audits is set according to the ranking of the auditable units by the magnitude of risk, based on a limited number of defined characteristics.

COA assesses the operation of risk management activities by the units as well as the design of the risk management and internal control systems by performing risk-based audits looking at the key processes and activities for the specific units. With these audits, COA closes the risk management cycle and provides additional assurance to the Managing Board on the effectiveness of the design and operation of the risk management and internal control systems.

COA reports its audit results twice a year to the Managing Board. It also shares an overview with the Audit Committee of the Supervisory Board and communicates the executive summary of each audit report to the CFO and CEO.

In 2017, COA executed 51 audits. In general, findings are considered improvement opportunities as part of a healthy learning culture. In about 5% of the audited areas (e.g. operations, finance, SHE, commercial) significant management attention was needed to come to the DSM standard. In the rare event of insufficient follow-up of a finding, the Director of COA escalates the finding to the CEO.

Dutch Corporate Governance Code

DSM supports the Dutch Corporate Governance Code, which was most recently amended in 2016 and is applicable as of the financial year 2017. The Dutch Corporate Governance Code can be found on

DSM ensures its continued compliance with the Dutch Corporate Governance Code, and has worked on implementing the amendments in its internal regulations and practices where applicable. The last step in this process will be the amendment of DSM's Articles of Association, for approval by the 2018 General Meeting of Shareholders.

Long-term value creation is embedded in both DSM's Strategy 2018: Driving Profitable Growth and the company's culture: our mission is to create brighter lives for people today and generations to come. Sustainability is at the core of how we fulfill that mission, and to achieve this, DSM considers People, Planet and Profit in all we do. With our Strategy 2018, we drive our business and innovation strategies in order to address the challenges of nutrition & health, climate & energy and resource scarcity. More information on how long-term value creation is fundamental to our strategy and culture can be found in the Strategy and People sections of this annual report, as well as on How DSM creates value for its stakeholders and on DSM and the Sustainable Development Goals.

With respect to the appointment of members of the Managing Board for a period of at most four years (Best Practice 2.2), it should be noted that DSM has adhered to this Best Practice since the introduction of the Dutch Corporate Governance Code in 2004. Since DSM respects agreements made before the introduction of the 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 organized into clusters, thus ensuring coherence of operations and the leveraging of resources within each cluster. The clusters are the main organizational entities for external strategic and financial reporting. This structure ensures flexibility, efficiency and speed of 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 achieving its ambitions. The support functions and functional excellence departments are paid for the services they supply by the users, which are for the greater 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 ICT. 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 Managing Board, Executive Committee, functional and regional levels, and includes the governance relations with the immediately superior levels (Supervisory Board and shareholders) and the operational units.

The company's strategic direction and objectives are set by means of a Corporate Strategy Dialogue. In November 2015, DSM presented the outcome of the latest Corporate Strategy Dialogue: 'Strategy 2018: Driving Profitable Growth', which is described in detail in DSM's Integrated Annual Report 2015 and on the company website. As we delivered well ahead of this strategy for the second year in a row in 2017, we brought forward our regular strategy review process for the period beyond 2018.

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, 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, monitor the effectiveness of the risk management and internal control system by process risk assessments and internal audits, and regularly discuss the findings with the responsible Executive Committee member.

Independent audits for all operational units are 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 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 for the implementation of the DSM rules on the holding and execution of transactions in DSM financial instruments, among other things. A third committee at corporate level is the Fraud Committee, which was installed to ensure structural follow-up of fraud cases with the aim of reducing fraud exposure. Relevant corporate functions participate in the Fraud Committee under the chairmanship of the CFO.

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 2017:

  • 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, the strategic partnership with the World Economic Forum, nutrition related initiatives including the WFP partnership, and chaired the Inclusion & Diversity Council;
  • Geraldine Matchett integrated sustainability into financial decision making and represented DSM in the Accounting for Sustainability (A4S) CFO Leadership Network. She also oversaw our efforts and commitment towards the Taskforce for Climate-related Financial Disclosures recommendations; and
  • Dimitri de Vreeze was responsible for Safety, Health and Environment (SHE) and also 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' on Committees.

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 2017 together with the Managing Board and a number of senior executives. Subjects discussed included DSM's corporate sustainability strategy, innovation project updates, climate strategy, circular and bio-based solutions, and a feedback session on the Bright Minds Challenge and possible next steps. They also had the opportunity to visit the new Rosalind Franklin Biotechnology Center in Delft (Netherlands). At the same time, Jessica Fanzo who joined in late 2016 and Robin Chase who joined in 2017 were welcomed to the Sustainability Advisory Board by Feike Sijbesma.

Sustainability Advisory Board

Robin Chase (f)
Co-founder and former CEO of Zipcar, co-founder of Veniam, board member of the World Resources Institute, and Tucows, and serves as an informal advisor to many cities, national governments, and transport agencies on the transition to shared automated vehicles. 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, Director of the Global Food Ethics and Policy Program and co-chair of the Global Nutrition Report. She has previously held positions in nutrition advisory, advocacy and research organizations in the US, Rome (Italy) and Kenya. Nationality: American.
Paul Gilding (m)
Social entrepreneur, author and corporate strategy advisor. Fellow at the 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)
Partner at SYSTEMIQ since 2017. Special representative for climate change of the UK government from 2013 to 2017. 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.

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 best practices and communications on SHE issues.