Annual report 2010 - plazacenters

Management and governance
Corporate governance
continued
resolution in such respect shall be adopted unanimously in
a meeting in which all members of the Board are present or
represented. Since Mr Ran Shtarkman is, as of January 1, 2010,
both executive director of the Company and Co-Chief Executive
Officer with Elbit Imaging, the Company’s parent company,
there may be conflicts of interest in respect of Mr Shtarkman
representing the Company. In order to enable Mr Shtarkman
to, in his capacity of CEO represent the Company in all matters,
the Articles of Association include this possibility, provided,
as stated above, that in such matter the underlying Board
resolution has been adopted anonymously.
• Best Practice Provision II.3.4 and Best Practice Provision III.6.3
stipulate inter alia that decisions to enter into transactions in
which there are conflicts of interest with management board
members that are of material significance to the Company
and/or to the relevant Board members require the approval
of the non-executive directors. Though, pursuant to the
Articles, each Board member is obliged to notify all direct and
indirect conflicts of interest, the Articles contain no specific
approval clause.
• Best Practice Provision III.1.7 stipulates that the supervisory
board shall discuss at least once a year on its own, both its own
functioning and that of its individual members, and the
conclusions that must be drawn on the basis thereof. The
desired profile, composition and competence of the supervisory
board shall also be discussed. Moreover, the supervisory board
shall discuss at least once a year without the management
board being present, the functioning of the management board
as an organ of the Company and the performance of its
individual members, and the conclusions that must be drawn on
the basis thereof. In 2010 the non-executive directors have not
specifically discussed the items that appear in this Best Practice
Provision on separate occasions. The Board, however, feels it
important to notify the shareholders that as a rule, every Board
meeting includes an assessment by all Board members of their
own functioning and that of their fellow Board members.
The Board is of the view that, given the fact that the Company
has a one-tier board rather than a separate management board
and supervisory board, this course of action appropriately meets
the requirements as laid down in this Best Practice Provision.
• Best Practice Provision III.1.8 stipulates that the supervisory
board shall discuss at least once a year the corporate strategy
and the risks of business and the results of assessment by the
management board of the structure and operation of the
internal risks management and control systems, as well as
any significant changes thereto. In 2009, there have not been
separate meetings of the non-executive directors to discuss
the items mentioned in this Best Practice Provision. The reason
therefore is that risk management at the Company is, pursuant
to the internally applicable Corporate Governance regulations,
a matter specifically reserved for decision by the full Board.
Board meetings in 2009 have included discussions in respect
of corporate strategy and risk management and periodically
throughout the year, the internal system of risk management
has been assessed by the full Board.
• Best Practice Provision III.3.3 and Best Practice Provision III.4.1
(a) stipulate that all supervisory board members shall follow
an induction program. Since 2006, no new non-executive
directors have started working in the Company and it is not
envisaged that in the foreseeable future, there will be new
non-executive directors, there is currently no induction
program in place.
• Best Practice Provision III.3.5 stipulates that a non-executive
director (in terms of the Dutch Corporate Governance Code a
supervisory director (commissaris)) may be appointed to the
Board for a maximum of three four-year terms. Section 15 of the
Articles provides for a retirement schedule whereby directors
who have been in office for not less than three consecutive
Annual General Meetings shall retire from office. Pursuant to
section 15.6 of the Articles, such a director may be reappointed,
which could result in a term of office which is longer than three
four-year terms.
• Best Practice Provision III.4.2 states that the chairman of the
supervisory board shall not be a former member of the
management board of the Company. Mr Mordechay Zisser
functions as Chairman of the Board while being an executive
director. For an explanation of the deviation from this Best
Practice Provision, see the remark made for Best Practice
Provision III.8.1.
• Best Practice Provision III.5.1 provides that the committee rules
stipulate that a maximum of one member of each committee
need not be independent within the meaning of Best Practice
Provision III.2.2 The Company’s Nomination Committee is
comprised of three members, two of whom, Messrs Yitzhaki
and Paap, are considered to be non-independent. The Board
believes that the composition of the Nomination Committee
as currently envisaged is in the best interests of the Company,
given the skills and experience of the Committee members.
• Best Practice provision III.5.6 stipulates that the Audit Committee
must not be chaired by the Chairman of the Board or by a
former executive director of the Company. The Company’s Audit
Committee is chaired by Mr Shimon Yitzhaki, who has been an
executive director of the Company and thus the Company
deviates from this Best Practice Provision. The Board, however,
believes that given Mr Yitzhaki’s extensive financial experience,
chairmanship of the Audit Committee is appropriate.
• Best Practice Provision III.5.11 inter alia provides that the
Remuneration Committee shall not be chaired by a nonexecutive
director who is either a former executive director or a
member of the management board of another listed company.
Since the Remuneration Committee is chaired by Mr Shimon
Yitzhaki, who is a former executive director and serves as
President of Elbit Imaging Ltd., the Company deviates from
this requirement. The Board is convinced that the experience
of Mr Yitzhaki in this respect should be considered more
important than the fact that Mr Yitzhaki is a board member
of another listed company.
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Plaza Centers N.V. Annual report 2010