Annual report 20075MB - Essent

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7www.essent.euCorporate governance78 Essent N.V. 2007 Annual Repor t
www.essent.euEssent is a public limited liability company incorporated under Dutch law in accordance withSections 152 and following of Book 2 of the Netherlands Civil Code. This means that Essenthas to have a two-tier board structure. Essent’s shares are owned by Dutch provincial andmunicipal authorities.Apart from Dutch and EU legislation and case law, corporate governance at Essent conformsto the Dutch Corporate Governance Code (‘Code’). Although the Code formally appliesto listed Dutch companies, Essent decided that, given its size and the societal significance ofits products, it would comply with the Code.The Executive Board and the Supervisory Board endorse the basic standpoint of the Codethat a company is a long-term form of collaboration between its stakeholders: groups andindividuals involved with the company who directly or indirectly influence, or are influencedby, the achievement of the company’s objectives. The stakeholders are the employees, shareholdersand other providers of capital, suppliers and customers, but also government andsocietal groupings. The Executive Board and the Supervisory Board have the overall responsibilityfor weighing up the interests of these groups, with a view to ensuring the continuity ofthe company. With this fully in mind, both Boards decided on adoption of as much of the Codeas possible. For compliance with those parts of the Code that the current nature of Essent asan unlisted two-tier company whose shareholders are local authorities rules out, the Boardshave had to refrain from applying a number of recommendations. These are:III.8.1-4 One-tier management structure;IV. 1.1 Powers of the General Meeting of Shareholders in non-two-tier companies;IV. 1.2 Voting rights on financing preference shares;IV. 2.1-8 Depositary receipts for shares.Regarding best practice provisions IV.4.1 to IV.4.3, applying to the responsibilities of institutionalinvestors, the Executive Board and the Supervisory Board have determined that they falloutside their remit.One best practice provision has been only partly adopted by the two Boards:II. 1.1 The term of office of members of the Executive Board is to be a maximum of four years.Deviations from the Code are explained later in this section.Essent sets out its corporate governance structure each year in its annual report and submitsall substantial changes to the company’s structure for discussion by the General Meeting ofShareholders.The preamble to the Code asserts that good entrepreneurship and good supervision are thecornerstones of good corporate governance. The bodies responsible for this are the GeneralMeeting of Shareholders, the Supervisory Board and the Executive Board, supported by aneffective system of risk management and internal controls and the independent audit.General Meeting of ShareholdersThe highest decision-making body within Essent is the General Meeting of Shareholders,which convenes at least once a year. The General Meeting of Shareholders adopts the financialstatements, including the proposed appropriation of profit, and endorses or rejects theconduct of affairs and the supervision of it.The law also prescribes that some decisions of the Executive Board are subject to approvalby the General Meeting of Shareholders. In addition, the company’s strategy is discussedeach year with the General Meeting of Shareholders, whose approval is required for significantchanges.Resolutions are passed by an absolute majority of votes cast, unless the law or Articles ofAssociation prescribe a qualified majority.79Essent N.V. 2007 Annual Repor t › Report of the Executive Board › Corporate governance
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Page 94 and 95: www.essent.eu>ContentsIntroduction
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A world premiere: the first shipmen
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