08 Governance

Corporate governance is all about the way that Gasunie is run, about how management is supervised and how we render account. Good corporate governance is a precondition for effectiveness and efficiency in achieving the goals we have set ourselves. It ensures adequate risk management and careful consideration of the interests of all of Gasunie’s stakeholders.

The Executive Board is aware that no risk management systems, no matter how professional, can offer absolute certainty that the company objectives will be achieved or that such systems can fully prevent material inaccuracies, loss, fraud or violations of the laws and regulations.

With respect to the financial reporting risks, the Executive Board states that the internal risk management and audit systems provide a sufficient degree of certainty, that the financial reporting does not contain any material inaccuracies and that the risk management and audit systems in the year under review functioned adequately. Any deficiencies, of which there were none this year, are included in the annual report.

Material risks that are relevant for the coming year are part of this annual report. The expectation is that the continuity of the company is guaranteed for the coming twelve months.

The following documents on our corporate governance are available on the Gasunie website:

• Rules of procedure governing the principles and best practices of the Supervisory Board and the committees
• Rules of procedure governing the principles and best practices of the Executive Board
• ‘Report what is wrong’ scheme (on how to deal with suspected misconduct);
• Conduct Guidelines – Working Together
• ‘Apply or explain’ overview in relation to application of the Dutch Corporate Governance Code.

Governance and Management Control
Gasunie’s Governance and Management Control architecture is based on the Three Lines Model. The basic principle underlying this model is that line management (the first line) bears operational responsibility for risk management. The second line, made up of specialists like those in Risk Management, Control and Compliance, supports and advises the first line. The third line comprises the Internal Audit department, which conducts audits to review the functioning and effectiveness of the risk management and control system.

The Executive Board has final responsibility for risk management and is accountable to the Supervisory Board for that. The Supervisory Board regularly talks to individual members or the entire Executive Board about governance and management control, addressing things such as important risks and audit results. As a result, risk management is an activity that is performed at all levels of the organisation.

Risk management 
Key aspects of our risk management efforts are to define the corporate risk appetite and run risk analyses at various levels of the organisation. The corporate risk appetite and corporate risk analysis are detailed in the following. 

Corporate Risk Management 
Every year, the Executive Board establishes the risk appetite with regard to the three pillars of the strategy. In so doing, we make a statement about the extent to which the organisation is prepared to accept risks relating to attaining its strategic objectives. We furthermore apply a number of general principles that cut across the strategic pillars and that we, as an organisation, must comply with at all times. Our risk appetite serves as a guideline in our strategic and operational decision-making. 

General principles
We endeavour to prevent unsafe situations that could endanger our fellow human beings, employees, contractors or the local community. We act on the basis of the highest safety standards in our sector. We do our utmost to avoid material errors in financial systems or external reports and we are not prepared to take risks that could limit our access to financial markets.

We are strongly committed to complying with the law. In our operating activities, we may be confronted with dilemmas. As and when that happens, we deal with them transparently. We try to avoid risks that could harm our reputation, so as to retain our social licence to operate and licence to grow.

Strategic direction Optimise the infrastructure
We focus on retaining our licence to operate. We make decisions relating to transmission security in line with our risk-based asset management framework. The low regulated return in this strategic pillar goes hand in hand with a risk averse financial profile. Long-term internal economic value creation is important here. We secure revenue before making strategic investment decisions. 

Strategic direction Facilitate connecting Europe
Although transmission security is just as important here as in the ‘Optimising infrastructure’ strategic pillar, we accept that we are, to a certain extent, dependent on trusted parties that may apply different operational standards. We base financial risks relating to strategic investments on an acceptable balance between risk and return. Furthermore, we test strategic investments for public relevance and social impact. Long-term external economic value creation is the focus here.

Strategic direction Accelerate the energy transition
In this strategic pillar, dependence on external partners and the innovative nature of projects may require different operational standards. Entrepreneurial skills are needed for creating value in the long term, which necessitates a higher financial risk appetite for strategic investments. We are prepared to accept more uncertainty with regard to the expected returns for the sake of accelerating the energy transition and the long-term external social value it will create.

Compliance management
Compliance at Gasunie focuses on promoting and enforcing compliance with national and international laws and regulations, as well as compliance with procedures, standards and internal rules. The aim of compliance is to safeguard the integrity of the organisation, to protect management and employees, and to avoid legal or regulatory sanctions, material financial loss or loss of reputation (or the risk of such).

Gasunie’s compliance management system is based on the international compliance management standard and laid down in our compliance regulations, which detail the responsibilities for compliance and our compliance monitoring and reporting. All Gasunie employees are responsible and accountable for their own behaviour. Managers have first-line responsibility for compliance with the rules within their unit or department. In the second line, the corporate compliance officer has an independent role and reports directly to the Executive Board. The Supervisory Board receives an annual report on the compliance system by way of the Compliance Letter.

Further details of the compliance policy can be found in a variety of internal documents, including ‘Conduct Guidelines – Working Together’, the ‘Report What is Wrong’ scheme, ‘Policy principles for dealing with information’, ‘GTS Rules of Procedure’, and ‘Regulations containing principles and best practices’ for the Executive Board and for the Supervisory Board. Suppliers also undertake to adhere to the Gasunie Supplier Code of Conduct.

The basic principle in drawing up the Conduct Guidelines was the question of what behaviour we need to be able to realise our ambitions for 2030 and what we expect from each other in terms of acting with integrity. The Conduct Guidelines were compiled in consultation with the Executive Board, the senior management and Gasunie employees who took part in focus groups.

The ‘Report What is Wrong’ scheme ensures that employees can confidentially report undesirable behaviour or an integrity concern. In the Netherlands, Gasunie has seven internal confidential counsellors, spread across the various Gasunie locations, as well as one external confidential counsellor, all of whom can be consulted on a confidential basis.

In addition, Gasunie has a committee of inquiry in the Netherlands that investigates reports. Not every conversation with the confidential counsellor results in a report that the inquiry committee considers. And not every report is the result of a talk with the confidential counsellor: people can also approach the inquiry committee directly.

In 2021, a total of nineteen people consulted the confidential counsellors and reported a total of sixteen incidents (cases), of which thirteen related to undesirable behaviour and three to integrity issues. For eight of the nineteen people, the consultation concerned other matters they wanted to discuss confidentially (private life, labour conflicts, concern for the wellbeing of a colleague).

The committee of inquiry received no reports of undesirable behaviour or integrity issues in 2021, and we found no cases of bribery.

An investigation that was started in 2020 into fraud by several employees and by employees of a supplier was completed in 2021 and resulted in employment sanctions.

In Germany, Gasunie employees can submit reports to seven confidential counsellors, an equal opportunities officer, the Betriebsrat (works council) or the HR department.

Gasunie Deutschland did not receive any reports of undesirable behaviour or integrity issues in 2021 and found no cases of bribery.

Every Gasunie employee is required to handle company resources and information with care. The ‘Policy principles for dealing with information’ have been drawn up to provide them support in this area. This document sets out the most important rules for handling information and the company resources made available at Gasunie for this purpose.

‘Regulations containing principles and best practices’ for the Executive Board and for the Supervisory Board reflect the principles and best practice provisions of the Dutch Corporate Governance Code, insofar as these are relevant to and apply to the company.

Managing the risks we face
Gasunie uses a number of tools to identify the various risks/categories of risks: 

In the overview below, we present a brief rundown of all the current corporate risks. All risks shown here have a potentially significant material impact on our ability to achieve our strategic objectives or on the execution of business processes. In 2021 we added getting a low ESG rating to the general risks.

Our strategic risks

Our operational risks

Risk management - looking back at 2021

• The organisation adapted quickly to the COVID-19 pandemic and the limitations this placed on operations. The economic impact of the pandemic is indirectly visible in the implementation of projects in the form of cost increases.
• ACM’s new Method Decision has removed some uncertainty in the short term with regard to the future profitability and payback potential of our Dutch gas transmission services.
• Risk management plays a prominent role in the development of new projects, such as in the field of hydrogen, CCS and heat. We took a positive FID for WarmtelinQ in 2021 after the risk profile improved significantly as a result of grant commitments.
• As a result of risk-driven scenario analyses and strategic early warning signs, risk management has come to play a greater role in checking the robustness of the strategy.

Risk management – looking ahead to 2022

• Public support for the energy transition is growing, and the laws and regulations seem to be moving in a positive direction too. However, these strategic success factors remain fragile and require constant attention.
• New risks arising are potential reputational risk as a result of partnerships with players in the fossil fuel industry and increasing reliance on government funding and thus fluctuations in government support.
• We will investigate how we can adapt our current risk appetite to the revised value creation model and, as a result, in assessing our risk appetite we will be looking more closely at the social impact aspect.
• We will embed risk management more fully in project decision making. Where relevant, we will work on improving risk management at project portfolio level.
• And we will continue to develop our strategic scenario analysis.

As the Supervisory Board, we supervise and give advice (on request and unsolicited) to the management with regard to formulating and achieving the objectives, strategy and policy of N.V. Nederlandse Gasunie. We act as the employer of the members of the Executive Board according to the articles of association. The Supervisory Board always acts in the company’s best interest, weighing the interests of the company’s stakeholders, such as the shareholder, employees, direct and indirect customers, and society (‘the public interest’) in doing so.

In 2021, measures that should contribute to closing the Groningen gas field were in full swing. The key activities for Gasunie concern the construction of the nitrogen installation in Zuidbroek, investments in the network, and advising the Minister of Economic Affairs and Climate Policy on security of supply. With regard to the energy transition, there was a phase change, from formulating the vision to decision-making and implementation. In addition, together with the Executive Board we have implemented a number of changes in our governance to guide the supervision from the perspective of short and long-term value creation. The composition of the Supervisory Board has also changed, with more international connections – with Germany in particular.

The Russian invasion of Ukraine is a humanitarian disaster. We sympathise with the people who are suffering now. The Russian military violence and the political and economic reactions to it will have an impact on Europe's energy supply. All this is taking place at a time when the collective dependence on imported natural gas has increased with the reduction of production in the Netherlands. Gas prices, which already rose significantly in 2021 and led to major cost increases for businesses and households at the time of writing, have risen even further. ENTSOG (the European Network of Transmission System Operators for Gas) published a study at the end of 2021 that concluded that Europe’s gas dependence in terms of infrastructure is manageable, but that it is essential that the gas storage facilities be sufficiently filled to guarantee security of supply during a cold winter. In the field of energy transition, too, we see increasing international interdependencies. One only has to consider the EU climate targets, the European Commission’s overarching guidance, and new cross-border collaborations, for example.

The floods in Limburg and parts of Germany caused by climate change have made the urgency of the energy transition and limiting the temperature increase to 1.5 degrees even clearer. At the UN Climate Change Conference held in Glasgow (COP26), additional steps were taken to curb the use of fossil fuels. The European Commission converted its Green Deal into an ambitious ‘Fit for 55’ package, a set of measures aimed at achieving a 55% reduction in greenhouse gas emissions by 2030. And in 2021 new coalition agreements were concluded in both Germany and the Netherlands with significant ambitions in the field of cutting emissions. A key milestone was reached with the decision of the Dutch government on rolling out a national infrastructure for the transmission of hydrogen and contracting Gasunie to build it. Moreover, the Dutch Cabinet decided to release the financial resources to enable this. Hydrogen, solar, wind, green gas, residual heat and carbon capture, transport and storage (CCS) are key elements in all the plans. In our region we see different choices with regard to the use of natural gas or the contribution of nuclear energy. In the Netherlands, demand for natural gas is on the decline and an exploration into the construction of nuclear power plants is being launched, while in Germany, with the Kohleausstieg (coal phase-out) and the Atomausstieg (nuclear power phase-out) it is clear that the German government is anticipating an increase in gas-powered electricity generation.

In short, with the closure of the Groningen gas field and given the energy transition, the Netherlands’ position and role in new national and international energy supply chains have been strengthened and its dependence on these supply chains has increased. This is important for the energy policy in our core countries (the Netherlands and Germany) and so also for Gasunie’s operations.

2022–2024 business plan and value creation
The Supervisory Board adopted the 2022–2024 Gasunie Business Plan, including the associated risk profile and financing plan. Inspired by the Transition Pathway Initiative, Gasunie calculated what influence it will have on the Dutch national transition pathway up to and including 2030, based on the Business Plan, which should lead to a 95% cut in carbon emissions by 2050. This makes it clear how Gasunie, with its Vision 2030, can contribute to the Dutch climate targets. From the calculations it can be seen that Gasunie has influence over nearly 50% of the planned carbon emission reductions in the Netherlands on the way to 2030. Within that part, Gasunie can achieve a reduction of around 33 percentage points by making the infrastructure available that will enable Dutch companies and households to switch from natural gas to hydrogen or green gas and facilitate the transport and storage* of captured CO₂. In addition to guaranteeing security of supply and making the investments required to enable the closure of the Groningen gas field, this is the most important way in which Gasunie can create social value.

The investments in the Business Plan could cumulatively amount to € 7 billion over the period through to 2030; the actual figure depends on the materialisation of the investment projects as well as on exactly how the energy transition will progress, which remains extremely uncertain. One element of this is the evolving regulatory framework for the markets in which the energy transition activities are being developed. This poses new risks for Gasunie, a situation that requires maintaining close contact with the shareholder and ensuring good coordination with the policymaker(s) and regulatory authority/authorities. Profitability is expected to decline as a logical consequence of lower regulated returns in the Netherlands and Germany and higher business development costs. The Supervisory Board has assessed the financeability of the Business Plan and the related Vision 2030 and is of the view that the related investments are financeable while maintaining the targeted (solid A) credit rating.

Plan implementation in 2021
Gasunie performed well in the area of providing a safe infrastructure and showed robust results in the area of costs and profitability. The results of our participations like Gate, EnergyStock and Vertogas are also in line with their respective plans.

We approved several investment decisions, including investments in the German network to support the security of supply in the Netherlands and Germany in view of the energy transition. In the field of the energy transition, we took decisions regarding WarmtelinQ, the preparatory activities for the Porthos CO₂ storage project, and a ‘pre-investment’ for materials with a long delivery time for the initial stages of the national hydrogen transmission network.

On several occasions we also discussed progress in the construction of the nitrogen installation in Zuidbroek and the connection of nine industrial customers to GTS’ high-calorific network, both measures aimed at facilitating the closure of the Groningen field. Other projects that could result in the need for investment decisions in the coming years were also discussed. First and foremost, we of course discussed the decision of the Dutch government to appoint Gasunie to develop the Dutch hydrogen transmission infrastructure. Other projects, though even less imminent, are of course important at this stage too. Together with TenneT (Netherlands and Germany), Energinet (Denmark), and the Port of Rotterdam, Gasunie brought the plans for the North Sea Wind Power Hub to the next level. And together with Shell, German energy multinational RWE, Norway’s Equinor and Groningen Seaports, Gasunie launched one of Europe’s largest hydrogen projects, NortH2.

The Supervisory Board supports the company’s ambitions in all these areas and tries to constructively guide the Executive Board in this regard. In an advisory capacity, we also discussed other topics on several occasions, such as security of supply from an international and geopolitical perspective, the new regulatory regimes in the Netherlands and Germany, and the strategy for Germany.

Organisation under development
Gasunie’s transformation from a natural gas TSO to an energy infrastructure company will have a major impact on its organisational structure and culture, as well as on the development and opportunities of its employees. To get a better idea of the development opportunities for employees, a strategic HR plan is being developed. In this context, we are pleased that in this second pandemic year it has been possible, despite the circumstances, to maintain regular contact with the Works Council, including on one occasion being able to arrange a physical, highly interactive meeting between us. The Supervisory Board has a special interest in talent development. Unfortunately, the pandemic forced us to cancel a planned meeting with new trainees, the ‘top class’, technical trainees, and employees in the business development programme.

The Supervisory Board has nominated Han Fennema for reappointment for another term as CEO and Chair of the Executive Board. He has been a driving force in shaping Gasunie’s transition agenda. Gasunie is starting to get sufficient water under the keel, so to speak, with the transition agenda, and a number of major investment decisions will need to be taken in the upcoming period. Given this, we would like to maintain stability on the currently well-functioning Executive Board and we are happy to have Han Fennema here to ‘captain the ship’.

2021 financial statements
The Supervisory Board discussed the 2021 annual report, and upon receipt of the positive recommendation given by the Audit Committee and the unqualified auditor’s report from the external auditor PricewaterhouseCoopers Accountants N.V., it decided to submit the 2021 financial statements to the Annual General Meeting for adoption. In addition, we propose that, of the net profit, an amount of € 217.5 million be paid as dividend and that € 93.2 million be added to the other reserves.

Supervisory Board governance is changing
In an externally supervised evaluation in 2020, the Executive Board and Supervisory Board concluded that Gasunie’s transition from a natural gas TSO to an energy infrastructure company means that we also have to make changes to a number of aspects of the governance of (and between) the Supervisory Board and Executive Board. The Chairs of the Executive Board and Supervisory Board jointly investigated this in 2021, among other things by speaking with experts and consulting other companies in transition. This inspiring process has led to a number of changes that the Executive Board and Supervisory Board are jointly implementing in their agenda, working method and composition. These changes include the following:

• We are embedding social value creation in the mission/vision, objectives and KPIs and reporting on this.
• More attention will be paid to dilemmas and strategic risks when discussing strategy and the Business Plan.
• When determining succession for the Supervisory Board, the search will specifically include strategic acumen and knowledge of/connection with Germany and Brussels/the EU. In addition, specific attention will be paid to knowledge in the field of mergers & acquisitions and joint ventures. To make room for German and other nationalities and to broaden the view across the border, English will be the lingua franca of the Supervisory Board.
• A timeline of major investments that form the key milestones of the envisioned transition pathway for Gasunie in the Business Plan will be drawn up and a regular, rolling schedule of all projects that will in time require decision-making on the part of the Supervisory Board (or shareholder) will be prepared.
• A Risk Assessment Committee (RAC) with members drawn from the Supervisory Board will possibly be called upon to consider complex projects.
• More attention will be paid to the HR aspects of change through periodic discussions of strategic workforce planning and more meetings with the Works Council and employees.
• During the annual Supervisory Board performance review, in addition to the attention paid to the official aspects of the board’s performance, the review will focus on the ‘unofficial’ roles of the board and on mutual interaction.

Composition and discussions
Ate Visser was nominated by the Supervisory Board to the shareholder for reappointment for a new period of four years with effect from 29 March 2022. We are also pleased with the appointment of Johannes Meier and Anja Mutsaers as new members of the Supervisory Board, in anticipation of the mandatory retirement (after two terms) of Willem Schoeber and Martika Jonk in 2022. Previously CEO at the European Climate Foundation and with a strong background in digitalisation, Johannes is broadening our view to encompass the energy transition in Germany and Europe as a whole as well. Anja is a corporate lawyer, practice partner and member of the Management Board of international law firm De Brauw Blackstone Westbroek. She brings with her extensive legal knowledge and experience in mergers & acquisitions, joint ventures and the energy sector.

The Supervisory Board met 15 times in 2021 (mostly online due to COVID-19), with two of these meetings not involving the Executive Board, to discuss the Supervisory Board’s own performance and the Porthos project. In addition, one plenary meeting was held with the full Supervisory Board and Works Council. Supervisory Board members also attended consultative meetings of the Works Council. Members of the Supervisory Board went on working visits to the nitrogen installations (the existing one and the one under construction) near Zuidbroek, as well as to the EnergyStock and HyStock sites. The Chairs of the Executive Board and the Supervisory Board had one meeting with their peers at TenneT. Supervisory Board members Ate Visser, Willem Schoeber and Pieter Duisenberg were virtually present at the Gasunie Safety Day via a pre-recorded video presentation. In addition to each member’s own individual continuing professional education activities, the Executive Board and Supervisory Board also organise a number of joint sessions each year. In 2021, deep dive sessions were held jointly with the Executive Board and the Supervisory Board of TenneT concerning the 2030-2050 Comprehensive Infrastructure Survey (II3050) study and report, and there were also similar sessions concerning the international natural gas and hydrogen market and decision-making processes in the energy transition.

Contact with the Works Council
Individual members of the Supervisory Board attended two consultative meetings with the Works Council in 2021. It was also possible this year for all Supervisory Board members to attend the autumn meeting with the Works Council in person. This autumn meeting has become a tradition. In various rounds of talks at various tables, ideas on Gasunie’s course and the associated challenges for the organisation were freely exchanged. Both parties consider these sessions to be very useful.

The Works Council played an active role in drawing up the profiles for the new members of the Supervisory Board and in the selection interviews/selections. Ultimately, this also led to the Works Council approving the nomination for appointment of Anja Mutsaers as the nominated member of the Supervisory Board.

Remuneration, Selection and Appointment Committee
Members: Martika Jonk (Chair), Dirk Jan van den Berg, Pieter Duisenberg, Anja Mutsaers (as of 1 December).

The Remuneration, Selection and Appointment Committee held four online meetings in 2021 to discuss regular items, such as the achievement of the targets for the purpose of determining the Executive Board’s variable remuneration for 2020, the adoption of new quantitative and qualitative targets for variable target remuneration for the Executive Board for 2021, and the remuneration section of the annual report with regard to 2020. During the year, members of the committee spent a lot of time on the nomination process for two new members of the Supervisory Board. The Remuneration, Selection and Appointment Committee’s deliberations and findings are reported in the plenary meetings of the Supervisory Board. The committee’s meeting documents and minutes are made available to all Supervisory Board members.

We have the role of employer with respect to the members of the Executive Board according to the articles of association, and we are also responsible for a well-functioning Executive Board in general. To that end, the Remuneration, Selection and Appointment Committee periodically conducts formal performance reviews with all members of the Executive Board, most recently in January 2022. From the extensive contact we have with the members of the Executive Board, but also with the Works Council and other parties inside and outside the organisation, we have plenty of other input for forming an opinion on how the Executive Board manages the business. The Supervisory Board holds the view that the Executive Board’s performance is good and aligned with the phase that Gasunie currently finds itself in.

The outcomes of the annual evaluation have a major impact on the amount of the variable remuneration to be paid out. In our view, this is consistent with the importance of achieving the company’s long-term goals, but also the importance of matters like safety, security of supply and corporate social responsibility, matters that are important for Gasunie’s social licence to operate. The variable remuneration to be paid is determined by the full board on the advice of the Remuneration, Selection and Appointment Committee.

Audit Committee

Members: Carolina Wielinga (Chair), Willem Schoeber, Ate Visser, Johannes Meier (as of 1 September).

The Audit Committee assists the Supervisory Board in supervising matters such as the set-up and proper functioning of the internal risk management and control systems, the financial reporting process and setting up and maintaining associated internal procedures, the financing of the company and the relationship with the internal and external auditors. The Audit Committee met five times in 2021. The regular meetings were not only attended by the members of the Audit Committee, but also the CFO, the internal auditor, the external auditor and the group controller. In addition, the committee met with the external auditor and the internal auditor without management being present.

The agenda included regular items like the periodical internal and external financial reports, the Business Plan, taxation, financing, profit appropriation and dividend, the operational auditor’s periodical reports and working schedule, the external auditor’s audit plan, the 2020 annual report, including the financial statements for 2020, the management letter and the auditor’s report, the Executive Board’s Document of Representation, the risk matrix and the control of the main risks, developments in IT and the organisation, and the effectiveness of security to ensure safe and reliable gas transport.

In 2021, the Audit Committee again focused specifically on strategic risks and information security. Prior to the Audit Committee meetings, the chair of the Audit Committee speaks directly to the external auditor, usually in the presence of the CFO. The discussions and findings of the Audit Committee are reported in the plenary meetings of the Supervisory Board. The committee’s meeting documents and minutes are made available to all Supervisory Board members.

Contacts with the shareholder
The Supervisory Board had one formal consultation and further informal deliberations by telephone with the shareholder (the Financing Director on behalf of the Dutch Ministry of Finance). Fortunately, in this pandemic year, it was still possible to hold a physical meeting during the Annual General Meeting. This was combined with a working visit by the team of the Financing Directorate of the Minister of Finance to the Zuidbroek nitrogen installation currently under construction. The topics discussed included the strategy, the Business Plan, the funding plan, major projects and the Executive Board’s performance.

The relationship with the shareholder is open and constructive. This is especially important in this period because the energy transition demands an active role from the shareholder and more intensive interaction between the shareholder, the Executive Board and the Supervisory Board. The government plays a key controlling, coordinating and facilitating role in the transition pathway and it determines the preconditions for all players, including Gasunie. However, the new, often pioneering projects initiated by Gasunie in the context of the energy transition also mean a new trade-off between risk, return and social value, which must be entered into jointly by the shareholder, Executive Board and Supervisory Board.

The COVID-19 virus remained among us in 2021. Despite the pandemic and the significant amount of time people spent working from home, Gasunie was able to perform well this year, both in its primary infrastructural and operating activities and in its development and investment projects. This placed great demands on our employees. We would like to extend our gratitude to all employees and the Executive Board for the good teamwork and their efforts, commitment and resilience. We are proud of the social value that Gasunie has achieved in 2021 and of getting sufficient ‘water under the keel’ on our way to Vision 2030.

Groningen, March 2022

Supervisory Board of N.V. Nederlandse Gasunie

Pieter Duisenberg, Chair
Dirk Jan van den Berg, Vice-Chair
Carolina Wielinga
Martika Jonk
Ate Visser
Willem Schoeber
Johannes Meier
Anja Mutsaers

(1964, Dutch nationality, man) 

Han Fennema joined the Executive Board on 1 January 2014, taking on the position of CEO and chair of the Executive Board on 1 March 2014. He was reappointed on 1 March 2022. 

As chair of the Executive Board, Han Fennema has certain specific tasks and responsibilities, which are closely related to his coordinating role as CEO and are mentioned in Article 4.2 of the rules of procedure containing the principles and best practices of the Executive Board. He is also responsible for the GTS and GUD business units and the Human Resources, Corporate Business Development, Communications, Public Affairs, Audit and Safety departments. 

Between 2010 and 2014, Han Fennema was the CEO of Enexis, a position he combined with the chairmanship of Netbeheer Nederland from 2011 to 2013. Prior to that, he worked at Eneco and Exxon Mobil, among other companies. Han Fennema has a degree in computer science from the University of Twente. 

Other positions 

• Member of the Board, Koninklijke Vereniging van Gasfabrikanten in Nederland (KVGN) 
• Member of the Supervisory Board, Hanze University of Applied Sciences in Groningen (Vice-Chair) 
• Member of the Shareholders’ Committee, Nord Stream AG 
• Member of the International Supervisory Board, Energy Delta Institute 
• Member of the Advisory Board, Clingendael International Energy Programme 
• Member of the Executive Committee, International Gas Union 
• Member of the Advisory Committee, TNO Energy Transition 
• Member of the Board, German-Dutch Chamber of Commerce (DNHK), as of 16 September 2021 

(1978, Dutch nationality, woman) 

Janneke Hermes has been Gasunie’s CFO and member of the Executive Board since 1 October 2019. On the Executive Board, Janneke Hermes is responsible for financial reporting and the associated rendering of account to the Audit Committee and the Supervisory Board. In addition, she is responsible for: Finance & Control, Treasury, Risk Management, Procurement, IT and Legal Affairs. 

Janneke Hermes has held various management positions at Gasunie, including that of Treasury Control Manager (2005-2007), manager of employment terms and conditions (2014-2016), and Corporate Finance Manager since 2016. Janneke Hermes studied econometrics at the University of Groningen and followed the New Board Program at Nyenrode Business University. 

Other positions 

• Member of the Board, Pensioenfonds, N.V. Nederlandse Gasunie 
• Member of the Supervisory Board, Openbaar Onderwijs Groningen, as of 1 October 2021 

(1971, Dutch nationality, man) 

Bart Jan Hoevers, Managing Director of Gasunie Transport Services B.V., who joined the Executive Board as a titular member on 1 September 2017, was reappointed to the Board on 1 September 2021. On the Executive Board, he is responsible for the Unit Operations and Projects focus areas. 

Bart Jan Hoevers has been working at Gasunie since 2007, starting out as a business development project manager before moving on to the positions of Regulatory Affairs Manager and Network Development Manager. Prior to joining Gasunie, he worked at the Dutch Ministry of Finance, where he specialised in state shareholdings, and at the Dutch central bank (DNB). Hoevers studied monetary economics at the University of Groningen. 

Other positions 

• Member of the Board, Netbeheer Nederland 
• Member of the European Network of Transmission System Operators for Gas, until 1 July 2021 
• President of the European Network of Transmission System Operators for Gas, as of 1 July 2021

(1959, Dutch nationality, man) 

Ulco Vermeulen joined the Executive Board as a titular member on 1 May 2016. He was reappointed on 1 May 2020. Ulco Vermeulen is the Director of Business Development & Participations and is responsible for the Participations focus area. Vermeulen studied economics at the University of Groningen. 

Other positions 

• Member of the Supervisory Board, Anthony Veder Group N.V., as of 1 April 2021 
• Member of the Supervisory Board, ICE Endex Holding B.V  
• Chair of the Board, Groen Gas Nederland  
• Member of the International Supervisory Board, Energy Delta Institute 
• Member of the Supervisory Board, New Energy Coalition  
• Chair of the Board, TKI Gas  
• Member of the Supervisory Board, Ommelander Ziekenhuis Groningen

The remuneration policy was adopted by the Annual General Meeting on 14 July 2021, as proposed by the Supervisory Board, with due account taken of the recommendation of the Remuneration, Selection and Appointment Committee.

The aim of the remuneration policy is to attract, motivate and retain Executive Board members of the right quality and with the right experience, both from within the company and in the form of proven talent from the market. The remuneration reflects the responsibility borne by the members of the Executive Board, and is considered in the light of the applicable remuneration principles in the market (as explained below). Gasunie needs this managerial talent to achieve its strategic objectives. This policy is implemented based on the following considerations:

• In principle, having the Dutch state as a 100% shareholder, Gasunie applies the same criteria that are applied to the remuneration policy in state-owned companies. If the Supervisory Board feels that this may lead to unacceptable risks for the company, it will consult with the shareholder.
• Gasunie bases remuneration packages for members of the Executive Board on a market comparison, based on a relevant reference group in the labour market. This group consists of public, semi-public, private and international companies that are sufficiently comparable to Gasunie, both in terms of size (number of employees, assets and revenues) and in terms of activities. The comparison mainly includes companies from the energy, distribution, installation, construction and engineering consultancy sectors.
• The structure of the remuneration of members of the Executive Board is determined on the basis of market comparisons that also take into account the pay ratios within the company, thus creating a logically continuing salary line from the posts in the Executive Board to the posts under the Executive Board.
• Application of the variable remuneration policy depends on the achievement of short and long-term targets with respect to operational and strategic performance.

The remuneration consists of:

• a fixed component (annual basic salary)
• a variable component, dependent on the attainment of both short and long-term targets, as specified in the texts below
• the employer’s payment towards the pension contribution
• other secondary employment conditions.

When appointing members of the Executive Board, the Supervisory Board will limit the sum of the fixed and variable annual salary on appointment to a maximum of € 397,205 (2021 level) for the Chair of the Executive Board. The Supervisory Board decides on the level of annual salary increments. If the maximum salary has been reached, further growth is limited to the across-the-board increments laid down in the collective labour agreement.

The variable remuneration is based on the remuneration policy that has been approved by the shareholder. The maximum variable remuneration is 20% of the annual basic salary. The targets that must be attained in order to qualify for variable remuneration are agreed annually. These must be ambitious and reflect the company’s strategy focused on long-term value creation. The achievement of the objectives is determined on a discretionary basis, taking into account all circumstances and developments over the past year.  The Supervisory Board is authorised to adjust the variable component within the limits mentioned above if it is likely to lead to unfair outcomes due to exceptional circumstances during the performance period. The Supervisory Board is also authorised to reclaim from members of the Executive Board a variable bonus that was awarded on the basis of inaccurate financial or other data or ‘incorrect conduct’.

The Supervisory Board has chosen performance criteria that relate to the implementation of Gasunie’s strategic goals, both short and long-term. In defining the company’s strategy, the social function of Gasunie’s activities and their effects on society are explicitly taken into account. Performance criteria have therefore also been defined, relating to safety and transport security.

The variable remuneration elements are divided over five targets, each with a weighting of 4%. Four regular targets relate to achieving Gasunie’s business objectives in a safe, affordable and reliable manner, and to significantly advancing the company in achieving its long-term strategic objectives. Each year, the Supervisory Board sets a specific fifth target that focuses on a topic concerning which extra attention is requested in that year. For 2021, this concerned the further elaboration of the CSR policy and the concrete contribution that Gasunie will make in this context.

The Gasunie pension plan applies to members of the Executive Board. This is based on average pay and includes a personal contribution from the members of the Executive Board in accordance with the rules that also apply to other Gasunie employees.

Gasunie has put together a package of secondary employment conditions for its Executive Board members, which also applies to other staff.

Term of office
Members of the Executive Board are appointed for a period of four years, with the possibility of extension by four years each time. The members of the Executive Board under the articles of association have an employment contract with Gasunie for the same duration as their term in office. Their employment contract therefore ends automatically if they are not reappointed.

Notice period
Members of the Executive Board must provide three months’ notice of termination of their employment contract; for the company, a notice period of six months applies.

Severance pay
Severance pay for Executive Board members will be limited to a maximum of one year’s basic salary (i.e. the fixed part of the remuneration), in accordance with the Corporate Governance Code, except where such is clearly unreasonable. This compensation also includes any transition compensation. In principle, no severance pay is granted if a member of the Executive Board is not reappointed; a proposal from the Supervisory Board to deviate from this principle requires the approval of the shareholder.

Change of control
Executive Board members are covered by a ‘change of control’ clause, which states that if they are forced to leave the company due to a merger with, or the acquisition of the company by, an external party, or in the event of a fundamental change in the nature, management or structure of the company that is beyond the control of the Executive Board, they will be awarded compensation up to a maximum of one year’s basic salary (i.e. the fixed part of the remuneration), regardless of which party terminates the employment contract.

Based on the policy outlined above, the Supervisory Board granted the following annual basic salaries and variable bonuses for members of the Executive Board.

The Supervisory Board has set the variable remuneration of the Executive Board for 2021 at 18%. The Remuneration, Selection and Appointment Committee has given its advice on the achievement of the objectives, and the quantitative elements have been verified by the internal auditor. When determining the variable remuneration, the Supervisory Board took into account that Gasunie achieved good results in 2021, both operational and financial. With regard to safety and transport security, the stricter standards were met in carrying out the work. Gasunie has made progress in achieving the energy transition agenda, especially in the field of hydrogen. A target specifically for 2021 was included with regard to the further development of the CSR policy. Through the further elaboration of the ‘Green Deals’ an ambitious package of measures has been developed. The failure to achieve the ROIC and NOC targets was discussed, as well as the improvement that can be made in implementation of projects relating to the energy transition.

Variable remuneration is paid out following approval by the General Meeting of Shareholders.

The pay ratio at Gasunie is 5.05. This is the ratio between the total remuneration of the highest paid employee and the median of the total remuneration of all other employees in the Netherlands. The total remuneration is based on the sum of the annual taxable pay and the pension costs (employer’s contribution). In calculating the median, only those employees are taken into account who were employed for the entire year.

(as defined in Article 5:25c, paragraph 2(c) of the Dutch Financial Supervision Act) 

The members of the Executive Board hereby declare that, to the best of their knowledge, 

the financial statements give a true and fair view of the assets, liabilities, financial position and result of the company and the undertakings included in the consolidation taken as a whole; and that the annual report presents a fair view of the situation as at the balance sheet date, the course of affairs during the financial year of the company and its affiliates whose data have been included in its financial statements and that the essential risks facing the company have been described in the annual report.

The Executive Board, 

Mr J.J. Fennema*, chair 
Ms J. Hermes* 
Mr B.J. Hoevers 
Mr U. Vermeulen 

Groningen, 3 March 2022 

* Director under the articles of association