The Executive Board and the Supervisory Board (the “Board”) are responsible for the company’s corporate governance structure. The corporate governance of ForFarmers N.V. (the “Company”) is determined by the law, the Articles of Associationand the relevant regulations, which have been established based on the Dutch Corporate Governance Code (the “Code”)¹. The Executive Board and Supervisory Board believe, for historical and other reasons, that deviations from or qualifications of certain individual provisions of the Code by ForFarmers can be justified. These deviations or qualifications are explained below.

ForFarmers has published its Corporate Governance Statement² as part of the Executive Board report and as a separate document on its website. The document sets out how the Code is applied by the Company and provides information in accordance with the Decrees implementing Article 10 of the EU Takeover Directive and Article 3 of the EU Directive on disclosure of non-financial information. The Statement also contains information regarding the key features of the internal risk management and control systems in relation to ForFarmers’ financial reporting process, and the composition and functioning of the Executive Board, Executive Committee and the Board, as well as the functioning of the General Meeting of Shareholders (“AGM”).

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Deviations from and/or qualifications of the Code

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Key aspects of Corporate Governance

Executive Board and Executive Committee

The Executive Board, along with the other directors, also acts as the Executive Committee of ForFarmers. The Executive Board is responsible for the continuity of the Company and its affiliated enterprise. In accordance with its Regulations the Executive Board has developed a vision on long-term value creation for the Company and its affiliated enterprise and has – in consultation with the Supervisory Board – formulated a strategy consistent with this, with due consideration for aspects identified in best practice provision 1.1.1. i to vi of the Code. Given the size of the organisation and the importance of efficient reporting lines, the Executive Committee is responsible for operational management.
The Supervisory Board determines the number of members on the Executive Board. In the period under review the Executive Board had three members while the Executive Committee consisted of seven. The members of the Executive Board have been subject to the retirement schedule below since the AGM of 15 April 2016. Jan Potijk has indicated that he will not be available for reappointment in 2019.

There is no limit to the number of times members of the Executive Board can be reappointed, with each reappointment being limited to a period of four years.
In the period under review the Executive Board evaluated both its own collective performance and that of the individual members.

Supervisory Board

The Board supervises the policy of the Executive Board and the general affairs of the Company. The Board also advises the Executive Board. The Board is composed of six natural persons and has three key committees: the Audit Committee, the Remuneration Committee and the Selection and Appointment Committee. The Regulations of the Supervisory Board and its committees are published on the Company’s website along with the Profile of the Supervisory Board.

General Meeting of Shareholders

The Executive Board and the Board are responsible for ensuring that the AGM is properly informed and advised. In accordance with best practice provision 4.2.2 of the Code the Company has drawn up a Policy on bilateral contact with shareholders of the Company. As set out in this policy, due to historical and other reasons the relationship between the Company and Coöperatie FromFarmers U.A. is such as to justify supplementary agreements with regard to this relationship; these are set out in a Relationship Agreement.
The Company’s share capital is composed of ordinary shares, preference shares and one priority share. The ordinary shares of ForFarmers N.V. have been listed on Euronext Amsterdam since 24 May 2016. Furthermore depositary receipts of ordinary shares have been issued with the cooperation of the Company. No preference shares have been issued. Coöperatie FromFarmers U.A. is the holder of the priority share as explained in more detail in the Priority shareholder section.

ForFarmers Trust Office Foundation

The board of Stichting Beheer- en Administratiekantoor ForFarmers – the ForFarmers Trust Office Foundation (the “Trust Office Foundation”) – operates independently of the Company. The Trust Office Foundation holds ordinary shares in the Company’s capital and its purposes include (i) acquiring ordinary shares to administer in trust, (ii) issuing depositary receipts, (iii) acquiring, selling or encumbering shares for its own account, where appropriate, (iv) exercising the rights associated with the ordinary shares it holds and (v) granting proxies for the exercise of voting rights and accepting voting instructions concerning the exercise of voting rights, all with due observance of the Terms and Conditions of the trust. The Articles of Association, the Terms and Conditions and the Report of the Trust Office Foundation can be found on the Company’s website. Coöperatie FromFarmers U.A. has the sole power to issue binding voting instructions for the shares held by the Trust Office Foundation (and for which voting rights have not been requested).
The Trust Office Foundation shall only accept ordinary shares for purposes of administration in return for the issue of depositary receipts to (i) a holder of depositary receipts in the context of exercising rights in a rights issue, (ii) a person entitled to the balance of a participation account held with Coöperatie FromFarmers U.A. in the context of a conversion, (iii) an employee in the context of an employee participation plan, (iv) Coöperatie FromFarmers U.A. or (v) a party designated by Coöperatie FromFarmers U.A.

Priority shareholder

The priority share is held by Coöperatie FromFarmers U.A. Given that as at the most recent reference date of 1 January 2019 Coöperatie FromFarmers U.A. was able to exercise voting rights on over fifty per cent (50%)of the total number of votes to be cast on ordinary shares in relation to the shares it held and/or to give voting instructions with regard to the shares held by the Trust Office Foundation, Coöperatie FromFarmers U.A. as the priority shareholder:
(i) has a right of recommendation with respect to four of the six members of the Supervisory Board;
(ii) is entitled to appoint a member of the Supervisory Board as chairman after consultation with the Supervisory Board;
(iii) has a right of approval with regard to Executive Board decisions relating to:

1. moving the Company’s head office out of the east of the Netherlands (the provinces of Gelderland and Overijssel);

2. any major change in the identity or nature of the Company or its business as a result of (1) the transfer of all or nearly all of the business to a third party or (2) the commencement or termination of a long-term cooperation agreement between the Company or one of its subsidiaries and another legal entity or company, or as a fully liable partner in a limited partnership or general partnership, where the commencement or termination of such cooperation is of major significance to the Company;

3. the acquisition or disposal of any stake in the capital of a company amounting to at least one third of the company’s equity according to the balance sheet with explanatory notes or, in the event the company prepares a consolidated balance sheet, according to the consolidated balance sheet with explanatory notes as per the company’s annual accounts most recently adopted by the companyor one of its subsidiaries;

4. amendments to the Company’s articles of association;

5. the undertaking of a merger or demerger.

For the conditions applicable to holding the priority share and the special control rights associated with it in the event that the level at which the voting right can be exercised and/or voting instruction given amounts to 50% or less, please refer to the Corporate Governance Statement.

Protective measures

The Company has entered into a call option agreement with Stichting Continuïteit ForFarmers (the ForFarmers Continuity Foundation) with regard to preference shares. The foundation was established to safeguard the identity, strategy, independence and continuity of the business undertaken by the Company. The ForFarmers Continuity Foundation is a fully independent entity with an independent board. In addition Coöperatie FromFarmers U.A. holds a priority share with associated rights as set out in the Company’s Articles of Association. Furthermore Executive Board members are appointed solely on a binding recommendation from the Board while the AGM can take material decisions (for example regarding the issue of shares, dividends, amendments to the Articles of Association, mergers, demergers and dissolutions) only at the proposal of the Executive Board and with the approval of the Board.

Culture, Code of Conduct and Whistle-blower policy

ForFarmers expects its employees to act with integrity and to abide by local rules and procedures. Sustainability, along with the associated corporate social responsibility, is one of the three core values of ForFarmers, alongside ambition and partnership. The core values are aimed at long-term value creation and are ratified by the Board. ForFarmers has a Code of Conduct and a Whistle-blower Policy. ForFarmers’ core values and the Code of Conduct are actively communicated within the organisation, for example via regular employee engagement surveys. New members of staff follow an e-learning course covering all aspects of the Code of Conduct including topics such as combating bribery and corruption, avoiding conflicts of interest, the appropriate approach to gifts and hospitality, fair competition and handling confidential information.
Six incidents or suspected incidents were reported during the period under review. In all cases a high degree of confidentiality was maintained and the procedure set out in the whistle-blower policy was followed. Given the nature and/or impact of the incidents reported there was no need to disclose these publicly. The overview of reported incidents and their follow-up is discussed periodically with the Audit Committee and the Supervisory Board.

¹An English-language version of the Code can be consulted at http://www.mccg.nl/?page=4738.An overview of how ForFarmers N.V. has applied the Code can be found on the corporate website www.forfarmersgroup.eu.

²Pursuant to the provisions of the Decree of 29 August 2017 amending the Decree of 23 December 2004 to adopt further rules regarding the contents of the Executive Board report the Corporate Governance Statement is considered to be part of the Executive Board report.