During the year under review, the Supervisory Board performed its duties in accordance with applicable legislation and the Articles of Association of ASM International NV and supervised and advised the Management Board on an ongoing basis.
We present the ASMI 2017 Annual Report in accordance with IFRS, as prepared by the Management Board and reviewed by the Supervisory Board. Our independent auditors, KPMG Accountants NV, have audited these financial statements and issued an unqualified opinion. Please click here to link to the independent auditor’s report.
All of the members of the Supervisory Board have signed the financial statements in respect of the financial year 2017.
Supervision of the Management Board, its policy decisions and actions are entrusted to the Supervisory Board. In accordance with Dutch law, the Supervisory Board is a separate body, independent of the Management Board.
The Supervisory Board supervises and advises the Management Board in executing its responsibilities. The profile of the Supervisory Board describes the range of expertises that should be represented within the Board. The procedures of the Supervisory Board and the division of its duties are laid down in the Supervisory Board rules. Both documents are available on our website www.asm.com.
During 2017, the Supervisory Board met with the Management Board on seven occasions, and in one conference call. Heinrich Kreutzer, Martin van Pernis, and Ulrich Schumacher attended all Supervisory Board meetings with the Management Board, while Jan Lobbezoo attended all meetings except one and Stefanie Kahle-Galonske attended all meetings since her appointment.
|Supervisory Board||Audit committee||Nomination, Selection and Remuneration Committee (NSR)|
|Jan C. Lobbezoo||7/8||4/4||1/1|
|Heinrich W. Kreutzer||8/8||4/4||–|
|Martin C.J. van Pernis||8/8||–||1/1|
|Ulrich H.R. Schumacher||8/8||1/2||1/1|
|Attendance is expressed as the number of meetings attended out of the number eligible to be attended.|
In these meetings, the Boards discussed the strategy and the progress of implementation thereof, operations, business risks, product and market developments, the Company’s organization, management and financial structure, and performance, including further profitability improvements. The developments in corporate governance in general and the Corporate Governance Code specifically were discussed and reviewed. Other topics addressed by the Supervisory Board were the annual budget, the review of quarterly financial results and the preparation of the quarterly earnings press releases. The Supervisory Board also approved the dividend proposal as prepared by the Management Board and proposed at the AGM in 2017.
One of the meetings was specifically earmarked to discuss with the Management Board the long-term strategy of the company, the planned implementation of it, and the risks attached to its realization. In the long-term strategy meeting the Board discussed the semiconductor and semiconductor equipment market and outlook, the development of ASMI’s market share, the development of the competitive environment, technology and market trends, the progress with ASMI’s strategic priorities and ASMI’s long-term revenue and profit or loss forecasts. Also, strategic initiatives to be considered to improve the Company’s long-term value creation strategy were discussed. Certain topics discussed during the long-term strategy discussion will be followed up in subsequent meetings of the Board during 2018.
In addition, the Supervisory Board reviewed and discussed the functioning of the Supervisory Board, its committees, and its individual members through an internal assessment as conducted by the members of the Supervisory Board. The composition, competencies and functioning of the Supervisory Board, as also described in the Supervisory Board profile, and its committees were part of the assessment, as well as the composition of the Management Board, their performance, and the performance of its individual members, and the relationship between the Supervisory Board and the Management Board. The conclusion of the assessment was that both the Supervisory Board as the Management Board function properly and effectively, in addition some suggestions came up for future Supervisory Board meetings.
Included in the responsibilities of the Supervisory Board is to oversee the Company’s compliance with corporate governance standards and best practices. The Supervisory Board is of the opinion that the Company complies with the Dutch Corporate Governance Code.
On April 24, 2017, the Company announced it would sell a stake of 20 million shares of the total outstanding share capital in ASM Pacific Technology Ltd. (ASMPT) through a partial secondary share placement. The offering generated cash proceeds for ASMI of a total amount of approximately €245 million. Following the divestment, ASMI owned approximately 34% of the shares in ASMPT.
On September 22, 2017, the Company announced that it will commence a share buyback program of ASMI's common shares up to €250 million.
Then on November 2, 2017, the Company further announced that it intended to sell a stake of 37 million shares of the total outstanding share capital in ASMPT through a partial secondary share placement, representing a stake of approximately 9% in ASMPT. The Company announced its intention to distribute a part of the proceeds to its shareholders in the form of a tax efficient capital return. The offering generated cash proceeds for ASMI of a total amount of approximately €445 million.
The Supervisory Board is composed of five members. In May 2017, Mrs. Kahle-Galonske was elected as a member of the Supervisory Board for a period of four years. All five members are independent, in line with the Corporate Governance Code.
The Management Board remains composed of two members. During 2017, no changes took place in its composition.
The Supervisory Board recognizes the value of diversity amongst the members of the Supervisory Board and the members of the Management Board as stated in the ASMI diversity policy. Diversity is considered in any event to consist of gender, specific knowledge, work background, nationality, age and ethnic diversity, (technical) experience, and skills.
We strive to have a composition with at least 30% of the seats in the Management Board and Supervisory Board held by either gender. At the same time we aim for the best candidate taking into account the realization on the diversity criteria and match with the Supervisory Board profile.
In 2017, when searching for a new member of the Supervisory Board, special attention was given to seek for female candidates. With the appointment of Mrs. Kahle-Galonske as member of the Supervisory Board, we achieve a 20% female representation in the Supervisory Board. In 2017, the composition of the Management Board remained unchanged.
In case of open positions in the Supervisory Board or Management Board, the Supervisory Board prepares a profile based on the required educational and professional background and in the search will actively seek for candidates that support the realization of diversity on the earlier mentioned criteria.
The Supervisory Board is of the opinion that its current members are all independent as defined by the Dutch Corporate Governance Code. Neither the Chairman nor any other member of the Supervisory Board is a former member of ASMI’s Management Board, or has another relationship with ASMI which can be judged 'not independent' of ASMI.
The role of the Audit Committee is described in its charter, which is available on the Company’s website (www.asm.com). The Audit Committee consists of Messrs. Kreutzer (Chairman) and Lobbezoo, and Mrs. Kahle-Galonske. During the year, the Audit Committee met with the Management Board and KPMG Accountants, the Company’s independent auditors, on four occasions. Audit Committee discussions included: the Company’s financial reporting including the application of accounting principles; the Company’s financial position and financing programs, and tax planning; the Company’s internal risk management systems; effectiveness of internal controls; the audit performed and its findings, the Annual Report and financial statements; and the budget and the quarterly progress reports prepared by the Management Board. The internal auditor participated in all four Audit Committee meetings, presenting her own actions and findings.
On several occasions, the Audit Committee met with KPMG Accountants, without the members of the Management Board present, to discuss the risk of fraud. Furthermore, the Audit Committee discussed the auditor’s performance with the Management Board without KPMG Accountants present.
The role of the Nomination, Selection and Remuneration (NSR) Committee is described in its charter, which is available on the Company’s website, www.asm.com. In general, the NSR Committee advises the Supervisory Board on matters relating to the selection and nomination of new Management Board members, as well as the remuneration of the members of the Management Board. This Committee consists of Messrs. van Pernis (Chairman), Lobbezoo and Schumacher.
In 2017, the NSR Committee held one meeting. The topics discussed included the remuneration of the individual members of the Management Board. During the meeting of the Committee, the Chief Executive Officer was present, except when his own remuneration was discussed.
The remuneration of the members of the Management Board is disclosed in Note 24 to the Consolidated financial statements of the Annual Report. The remuneration of the members of the Management Board during 2017 is fully in accordance with the remuneration policy.
We extend gratitude and appreciation to ASMI employees worldwide for their many contributions and enduring commitment to the Company. It is their commitment and determination that enabled us to make substantial progress in 2017. We recognize that the cumulative efforts of our workforce are truly creating real value for all of our stakeholders.
J.C. Lobbezoo, Chairman
M.C.J. van Pernis
Almere, the Netherlands
March 16, 2018