• Home
  • Supervisory Board

Supervisory Board

4.1 TomTom Supervisory Board

As at 31 December 2016


4.1.1 Peter Wakkie

68/Chairman

Nationality Dutch
Date of first appointment 28 April 2009
Term of office 2013 - 2017

Former positions Member of the Executive Board of Royal Ahold NV
Current positions  Founding partner of Spinath + Wakkie BV, Chairman of the Supervisory Board of Wolters Kluwer NV and member of the Supervisory Board of BCD Holdings NV
Committees  Remuneration Committee, Selection and Appointment Committee (Chairman)

4.1.2 Doug Dunn

72/Deputy Chairman

Nationality British
Date of first appointment 13 May 2005
Term of office 2015 - 2017

Former positions  Chief Executive Officer and President of ASML Holding NV
Current positions  Non-Executive Director of Soitec SA and Global Foundries, Vice-Chairman of the Supervisory Board of BE Semiconductor Industries NV
Committees  Audit Committee

4.1.3 Ben van der Veer

65

Nationality Dutch
Date of first appointment 1 October 2008
Term of office 2016 - 2017

Former positions  Member and Chairman of the Board of Management of KPMG NV
Current positions  Non-Executive Director of RELX Group PLC, RELX PLC and RELX NV and member of the Supervisory Board of AEGON NV and Royal Friesland Campina NV
Committees  Audit Committee (Chairman)



4.1.4 Jacqueline Tammenoms Bakker

63

Nationality Dutch
Date of first appointment 1 May 2014
Term of office 2014 – 2018

Former positions  Non-executive Director of Tesco PLC, Vivendi and Director General at the Dutch Ministry of Transport, responsible for Civil Aviation and Freight Transport and Chairman of the High Level Group for the future of aviation regulation in Europe
Current positions  Non-Executive Director of CNH Industrial NV, member of the Supervisory Board of Unibail- Rodamco and the Groupe Wendel, Chairman of the Van Leer Group Foundation and Member of the advisory board of the Bath School of Management
Committees  Remuneration Committee (Chairman), Selection and Appointment Committee

4.1.5 Anita Elberse

44

Nationality American
Date of first appointment 1 May 2014
Term of office 2014 – 2018

Former positions  Visiting Fellow and Lecturer at The Wharton School University of Pennsylvania (2001-2003)
Current positions  Lincoln Filene Professor of Business Administration at Harvard Business School
Committees  Audit Committee

4.2 Supervisory Board report

TomTom's Supervisory Board is responsible for supervising and advising the Management Board in setting and achieving the company's strategy and its objectives. In performing its duties, the Supervisory Board is guided by the interests of the company and its stakeholders. The Supervisory Board is assisted in its decision-making process by the Audit Committee, the Remuneration Committee, and the Selection and Appointment Committee.

4.2.1 Introduction

During 2016, the company continued to gain momentum in the Automotive and Licensing business, and Telematics continued to grow. The Sports business showed double-digit growth again, while the PND market declined faster than expected. The company prepared itself to capture the opportunities in location-based services. With its innovative product portfolio and supportive technology, the company remains uniquely well placed to address the need for an accurate and up-to-date map.

The efforts and commitment of the employees of the company and its Management Board are greatly appreciated by the Supervisory Board. The Supervisory Board looks forward to a further successful execution of TomTom's growth strategy.

4.2.2 Composition

As at 31 December 2016, the Supervisory Board of TomTom consisted of five members: Peter Wakkie (Chairman), Doug Dunn (Deputy Chairman), Ben van der Veer, Jacqueline Tammenoms Bakker and Anita Elberse.

Guy Demuynck stepped down from the Supervisory Board after the 2016 General Meeting by which time he had served for eleven years.

Per 1 January 2017 the Supervisory Board of TomTom consists of six members, due to Jack de Kreij who was appointed at the 2016 General Meeting as a member of the Supervisory Board with an effective date of 1 January 2017 for a term of four years.

At the 2016 General Meeting, Ben van der Veer was re-appointed for a term of one year. This means that at the 2017 General Meeting Ben van der Veer will have served for nine years. Jack de Kreij will succeed Ben van der Veer as Chairman of the Audit Committee as of the 2017 General Meeting.

At the 2017 General Meeting the second term of Peter Wakkie will expire. Peter Wakkie will be proposed for re-appointment for a two-year term at this meeting, which means that after that time he will have served for ten years.

Doug Dunn will step down from the Supervisory Board after the 2017 General Meeting, by which time he will have served for twelve years, the maximum term according to the Corporate Governance Code (Code). Furthermore, Anita Elberse has decided to step down as a member of the Supervisory Board after the 2017 General Meeting. Her new leadership position at the Harvard Business School does not allow her to combine these duties with a seat on the Supervisory Board of TomTom.

The Supervisory Board nominated Michael Rhodin for appointment as a new member of the Supervisory Board for a term of four years, to be resolved upon and effective from the 2017 General Meeting. He will also become a member of the Audit Committee.

As a result of the above changes and provided that the proposed nominations will be adopted by the 2017 General Meeting, the Supervisory Board will consist of four members: Peter Wakkie (Chairman), Jacqueline Tammenoms Bakker (Deputy Chairman), Jack de Kreij and Michael Rhodin.

The Supervisory Board confirms that all members are independent as meant within the terms of the Code.

The composition of the Supervisory Board is in line with the Supervisory Board profile, as drawn up by the Supervisory Board and published on the company's website, in terms of experience, expertise, nationality, gender and age. As at 31 December 2016, two out of five members of the Supervisory Board were female.

No member of the Supervisory Board holds more than five directorships at Dutch 'large companies'.

Biographies of the members of the Supervisory Board as at 31 December 2016, as well as the information on the members as prescribed by the Code, can be found in the Profiles of the Supervisory Board section of this report. This section also provides details on the committees of the Supervisory Board.

4.2.3 Meetings in 2016

The Supervisory Board met fourteen times in 2016: six physical meetings and eight conference calls. The non-physical meetings were held to discuss financial updates and recent developments within the company in the months when no physical meeting was scheduled. The Management Board members attended all those meetings either in full or in part. The meetings of the Supervisory Board achieved an overall average attendance rate of 88%.

All members have had sufficient time available for their duties relating to their membership of the Supervisory Board. No members were frequently absent from the meetings. Their availability for ad-hoc calls, prompt response on emails and the fact that the members prepared the meetings well, regardless of their attendance at the meetings, and actively participated in the meeting discussions, demonstrate that they were all able to devote adequate attention to the company.

The agenda for the meetings was prepared through consultation with the Chairman, the Management Board and the Company Secretary. In addition to the regular meetings, the Chairman of the Supervisory Board had regular contact with the CEO of the company. Further, the members of the Supervisory Board also held informal consultations with members of the Management Board and senior management of the company to remain closely informed about the business.

Meetings of the Supervisory Board are preceded by committee meetings. The chairs of the committees work closely together with senior management and conduct regular face-to-face meetings to set the agendas and prepare all relevant information for the committee meetings.

4.2.4 Supervisory Board Activities

To facilitate open and productive discussions, the Management Board and senior management provided the Supervisory Board with comprehensive quarterly reports that outline the developments, achievements, challenges and opportunities in each business unit of the company before each physical meeting. These reports also included insight into noticeable market developments, trends and analyses. During the year, senior management was frequently invited to present a range of topics to the Supervisory Board.

It is important for the Supervisory Board to stay in touch with the talents within the company. For this purpose, among others, quarterly breakfast sessions were organised to facilitate a Meet & Greet between members of the Supervisory Board and a selective number of talents. In an open and transparent setting the Supervisory Board members were provided with feedback from the talents on several topics, such as the TomTom culture and dynamics, and operational challenges. The Supervisory Board strongly supports the company's efforts with regard to talent management as well as succession planning for key positions within the organisation and the Supervisory Board was regularly kept updated on these items, including the vacancy status of key positions.

The Supervisory Board devoted considerable time to reviewing strategic options and discussing the company's long-term strategy. An active role was played in ensuring that the Management Board's ideas were challenged and tested in order to reach decisions that would underpin the company's strategy. The group strategy and the business unit strategies were presented, reviewed, and constructive discussions were held with the Management Board and senior management. In addition, the Supervisory Board was kept regularly informed of major commercial opportunities, deals and partnerships.

During discussions with the Management Board, specific attention was paid to the execution of the strategy to diversify the Consumer business. The introduction of the next generation sports watches and fitness products (the TomTom Touch) and its traction in the market, were closely monitored during the year. The product roadmap, the marketing campaigns, which were planned for the launch of the new products in 2016, and the TomTom Sports brand proposition 'Get Going' were shared with the members of the Supervisory Board.

Frequent updates were provided to the Supervisory Board on the order intakes made which, together with orders secured earlier, will support the growth strategy of the Automotive business. In addition, the Supervisory Board closely followed the continued growth in the Telematics business.

The Supervisory Board was frequently updated on the innovative progress made with maps, traffic and navigation software and the positioning and traction of these technology components in the market. The new transactional mapmaking platform enables TomTom to address the need to provide for accurate and up-to-date maps for navigation applications and driver assistance applications, including Autonomous Driving.

The Supervisory Board was regularly updated on the efforts of management to align its business to better capture the growth opportunities in location-based services and to anticipate on the PND market, which declined faster than expected. There was also time dedicated to discussing the organisational structure, including the Research & Development set-up.

The company's financial results, its operating result and its cash generation from operations were presented and closely supervised throughout the year. The level of investment (both CAPEX and OPEX) in the core technologies of the company were thoroughly observed every quarter by the Supervisory Board. The Supervisory Board reviewed and approved the budget for 2017.

The Supervisory Board regularly gained insights into the constantly changing landscape which TomTom is operating in. During 2016, several demonstrations of innovative products (such as the TomTom Touch and TomTom City) were presented to the Supervisory Board.

Every quarter, the Supervisory Board was updated on the company's Investor Relations activities, such as share price developments and analysts' research and communication with shareholders. The press releases regarding the full-year and half-year results, and the quarterly trading updates were all reviewed and approved by the Supervisory Board. The Supervisory Board also reviewed and approved the other press releases which qualified as inside information and were published during the year, such as the preliminary disclosure of the financial results of the third quarter.

Through its Audit Committee, the Supervisory Board was kept informed about the company's strategic, operational, financial, legal and compliance risks, as well as the actions taken and systems in place to manage these risks.

The Supervisory Board received updates on the company's corporate social responsibility programmes and its intellectual property strategy. The Supervisory Board members were also informed about corporate governance developments and relevant regulations. Among others, the new Market Abuse Regulation, effective as of 3 July 2016, was discussed with the members, as well as the measures undertaken to comply with this new regulation. Further, the company's compliance programme was explained, including the online Code of Conduct game which was developed as part of this programme and demonstrated to the members of the Supervisory Board.

The composition, functioning and succession planning of the Management Board and the performance of its individual members were discussed.

The Supervisory Board assessed its own succession planning. With the anticipated retirement of Doug Dunn and the departure of Anita Elberse after the 2017 General Meeting, the Supervisory Board engaged with an external executive search agency. To secure that sufficient technology expertise is available within the Supervisory Board, it was decided to search for a new member with a strong technology background. The search was successfully completed, resulting in the decision of the Supervisory Board to make a nomination to the 2017 General Meeting to appoint Michael Rhodin as member of the Supervisory Board. For more information, reference is made to the Selection and Appointment Committee report.

The Supervisory Board discussed with the Management Board the talent management process for senior management within the organisation, including succession planning.  

4.2.5 Self-assessment

The Supervisory Board reviewed and discussed its own functioning, as well as that of its individual members, its committees and the Chairman. The evaluation of the Chairman was discussed by the entire Supervisory Board, without the Chairman present. In preparation of these discussions, the members of the Supervisory Board and Management Board provided feedback through a written assessment. The assessment included reviews of the composition and expertise of the Supervisory Board, its time management, its effectiveness, its dynamics and succession planning. The Supervisory Board's oversight on the company's strategy and the effectiveness of the strategy day, human resources management, risk management and internal controls were also reviewed.

The relationships between the individual members of the Supervisory Board and between the Supervisory Board and the Management Board were rated very high overall. The same applied in view of the atmosphere in the boardroom in terms of encouraging equal contribution, candid discussion and critical thinking. The induction of the new Supervisory Board member will be an attention point for the Supervisory Board in 2017. The Supervisory Board will continue to spend ample time in further understanding the opportunities for the company in Autonomous Driving and its innovative location technologies and, also in this respect, aims to visit one of the TomTom locations outside the Netherlands.

The Supervisory Board intends to bring in a third party to assess its functioning every three years; the next such occasion being in 2018.

4.2.6 Remuneration Committee Report

This Remuneration Report describes the activities of the Remuneration Committee (Committee), the Remuneration Policy for the Management Board and its application in 2016, as well as an outlook for 2017. The Remuneration Policy was first adopted by the General Meeting in 2005 and has since been amended several times, most recently in 2014. In line with Dutch legislation, the execution of the Remuneration Policy in 2016 will be put on the agenda for discussion as a separate agenda item at the 2017 General Meeting.

The Committee consists of two members: Jacqueline Tammenoms Bakker (Chairman) and Peter Wakkie.

Committee meetings

The Committee met four times in the course of 2016, with an overall attendance rate of 100%. Each meeting was also attended by Alain De Taeye, the Head of HR, the Head of Reward & Operations and the Company Secretary. Preparation meetings attended by the Chairman of the Committee, the Head of Reward & Operations and the Company Secretary were held prior to each Committee meeting.

Committee activities

The Committee monitored the effectiveness and relevance of the Remuneration Policy throughout the year. It also considered the extent to which the individual remuneration packages of the Management Board members were in line with the company's policy.

The Committee agreed on the key performance indicators (KPIs) and weighting levels set for the short-term variable remuneration of the Management Board and periodically reviewed the progress on the achievement of these KPIs. A scenario analysis was carried out within the terms of the Code to evaluate the variable components of the remuneration packages of the Management Board members.

The Committee spent time on the preparation for the 2016 General Meeting where the execution of the Remuneration Policy in 2015 appeared on the agenda as a separate agenda item.

The Committee defined a new peer group in 2015, which serves as an essential yardstick to determine the overall competitiveness of the company's Management Board remuneration and gives an appropriate reflection of the competitive markets in which TomTom is operating. The peer group consists of the following 22 companies: Wolters Kluwer, Harman, Garmin, ASM International, Temenos Group, Imagination Technology Group, SimCorp, CompuGroup Medical, Arris Group, Kudelski, GoPro, Trimble Navigation, Fleetmatics, Elektrobit, Telenav, Mix Telematics, Fitbit, LoJack, HERE, ASML, Philips, and NXP Semiconductors.

In 2015, the Committee concluded that the annual long-term incentive award levels continued to be below market median level, i.e. are the least competitive remuneration component. In 2016, the Committee reviewed and discussed the outcome of a study performed on long-term incentive structures against prevalent practice in the Netherlands, Europe and the US among the peer group companies as well as in the high-tech and general industry sectors overall. The Committee concluded to recommend to the Supervisory Board to bring the long-term incentive component more in line with the market, by increasing the percentage of the fixed salary of the Management Board members that determines the annual stock option grants. The Supervisory Board supported the recommendation of the Committee and concluded to increase, with effective date 1 January 2017, the long-term incentive grant level to 140% (was 100%) for the CEO, and to 100% (was 60%) for the other two members of the Management Board. This will be reflected in the 2017 long-term incentive grant.

The Committee evaluated its own functioning and concluded that its activities are satisfactory and adequately serve the company's needs.

Remuneration Policy

The company's Articles of Association state that the Supervisory Board must propose to the General Meeting the Remuneration Policy for the members of the Management Board and that the Remuneration Policy must be adopted by the General Meeting. The Supervisory Board determines the remuneration of individual members of the Management Board on the basis of criteria laid down in the Remuneration Policy. The Supervisory Board reviews this policy regularly in the light of internal and/or external developments. The full text of the policy can be found on the company's corporate website: corporate.tomtom.com/remuneration.cfm.

The company's Remuneration Policy must ensure that the company is able to attract and retain highly qualified executives to its Management Board in an international competitive market. It must also ensure that the Management Board members' remuneration is consistent with the company's strategy, its operational and financial results, and delivery of value to shareholders. Additionally, the policy must apply a responsible and sustainable remuneration framework in line with the general result-driven remuneration principles and practices throughout the company. The Remuneration Policy establishes that remuneration for the Management Board consists of four components: base salary, short-term incentive, long-term incentive and benefits (including pension scheme contributions).

Application in 2016

The details of the individual remuneration of all members of the Management Board and its costs to the company are presented in note 33 - Remuneration of Members of the Management Board and the Supervisory Board in the consolidated financial statements. The information described in the best practice provision II.2.13 (d) of the Code applicable to the financial year 2016, is also provided there.

The Remuneration Policy and the remuneration components of each of the members of the Management Board are benchmarked against a peer group whenever such benchmark is deemed to be necessary by the Committee.

1. Base salary at median market level

The objective is to align the base salary levels of TomTom Management Board members with median market practice in a measured way. Fixed remuneration consists of base salary plus holiday allowance, where applicable and in accordance with market practice.

Based on the outcome of the benchmark performed in 2015, it was concluded that the base salaries of Alain De Taeye and Taco Titulaer were in line with the median market level and did not need adjustment for 2016. The base salary of Harold Goddijn remains under median market level. However, it was decided not to bring his base salary closer to the median.

2. Short-term incentive

The intention of the percentage-of-salary bonus scheme is to ensure a uniform bonus structure throughout the organisation.

The level of cash payment is determined according to pre-determined criteria and objectives. TomTom's 'on-target' bonus percentages are assessed relative to the median 'on-target' bonus percentages of our peer group companies. The on-target bonus percentage for the CEO position is 80% of his base salary. It is 64% of the base salary for the other members of the Management Board. The maximum bonus potential is 1.5 times the 'on-target' bonus amounts (for the CEO this means a maximum of 120% and for the other two Management Board members 96%). In addition, the Supervisory Board may at its own discretion decide to reward bonuses for exceptional individual performance.

The performance criteria continued to be the same for 2016: the revenue KPI weighted at 50% and the EBIT KPI weighted at 50%. It is the Supervisory Board's opinion that these strong financially driven KPIs appropriately measure the company’s strategy focused on profitable growth. These KPIs are an important measure of the success of the execution of the company’s strategy and, as such, the remuneration is directly linked to performance of the company's strategy.

The pre-determined performance criteria in relation to the 2016 results of the company, did not allow for any pay-out under the short-term incentive scheme for any of the Management Board members.

The Supervisory Board is of the opinion that the continuous challenging economic environment and competitive market warranted strong financial control and therefore the strictly financial nature of the KPIs set for 2016 was appropriate.

3. Long-term incentive

The long-term incentive scheme, laid down in the TomTom NV Management Board Stock Option Plan, is aimed at attracting and retaining key talent in order to ensure the company's continued high performance in line with common practices within international companies in the technology sector.

With regard to the Management Board Stock Option Plan, options shall be granted conditional to continued employment of the Management Board member. The vesting of the options is not subject to the achievement of pre-determined performance criteria. The options will vest three years after the grant date.

The Supervisory Board confirmed that the unconditional option plan reflects the company's long-term focus on growth where value only materialises upon the successful execution of the company's strategy by the Management Board.  

The annual stock option grants are set as a percentage of the fixed salary of the Management Board members. The level for the CEO was set to a grant value equivalent to 100% of the fixed salary (resulting in 2016 in 112,500 stock options), and for the other two members of the Management Board to a grant value equivalent to 60% of the fixed salary (resulting in 2016 in 56,500 stock options for Alain De Taeye and 48,500 stock options for Taco Titulaer).

4. Benefits 

Members of the Management Board are eligible for and can opt to participate in the company's pension plans or receive a contribution to their respective private pension plan. According to the Remuneration Policy, the contribution to be paid by the company on behalf of a member of the Management Board is based on a percentage of the gross annual base salary and is capped at 20% of the gross annual base salary.

Harold Goddijn has opted to waive his rights to take part in the company's pension plan or to receive a pension allowance; as a result, he does not receive any contribution from the company.

The contributions to the private pension plan of Alain De Taeye are capped at 20% of the individual gross annual base salary.

The 2016 company's pension plan is based on a defined contribution plan with age-defined contribution percentages. For the financial year 2016, the pensionable salary was capped at €100,000. Under the 2016 company pension plan, Taco Titulaer paid a pension premium contribution of approximately 6.1% out of his pensionable-bearing salary. The company’s total pension contribution includes the company's contribution to the company’s pension plan and a gross allowance that can be spent on private pension savings, and is capped at, in total, 20% of the CFO's gross annual base salary in accordance with the Remuneration Policy.

In addition to the above-mentioned remuneration components, the Management Board members are entitled to remuneration for items such as medical insurance, death and disability insurance, housing and car allowances. They also benefit from directors' and officers' liability insurance coverage. These benefits are in line with market practice. The company does not provide loans to members of the Management Board.

Outlook 2017

The base salary for the CEO remains under median market level. However, it was decided not to bring the CEO's base salary closer to the median in 2017. The base salaries of the other two members of the Management Board are in line with the median market level and do not need adjustment for 2017.

For the short-term incentive scheme for 2017, the Supervisory Board feels it is appropriate to apply KPIs and weighting that measures the company’s strategy. Given the continued focus on growing the business, a revenue KPI for 2017 will continue to be applied weighted at 50%. The second KPI will change from EBIT to EBITDA minus CAPEX weighted at 50% in order to optimise profitability.

The Supervisory Board is of the opinion that the unconditional Management Board Stock Option Plan is appropriate and corresponds with the company's long-term focus on growth. To bring the long-term incentive component more in line with the market, the Supervisory Board decided to increase the long-term incentive grant level to 140% (was 100%) for the CEO, and to 100% (was 60%) for the other two members of the Management Board. This will be reflected in the 2017 long-term incentive grant.

Employment arrangements and severance compensation

The term of appointment for all members of the Management Board is four years, while the term of employment is indefinite. Management Board members may be re-appointed for another term of four years at a time.

The employment of a member of the Management Board may be terminated by or on the initiative of the company with a notice period of 12 months. In such event, the Management Board member is entitled to a severance payment limited to 50% of one year's base salary, unless a higher statutory severance compensation applies.

These terms will not apply if the employment of a member of the Management Board is terminated for any reason as set out in articles 7:677 (1) and 7:678 of the Dutch Civil Code. In such situations the Management Board member will not be entitled to any severance compensation. A member of the Management Board will not be entitled to severance compensation if the employment is terminated by himself, or on his own initiative.

Members of the Supervisory Board are not entitled to any benefits upon the termination of their appointment.

4.2.7 Selection and Appointment Committee Report

This Selection and Appointment Committee Report describes the main items discussed by the Selection and Appointment Committee (Committee) during the year 2016.

The Committee consists of two members: Peter Wakkie (Chairman) and Jacqueline Tammenoms Bakker.

Committee Meetings

The Selection and Appointment Committee met five times during the course of 2016, with an overall attendance rate of 100%. Each meeting was also attended by Alain De Taeye, the Head of HR and the Company Secretary.

Committee Activities

The Committee spent ample time on the composition of the Supervisory Board and its succession planning. It continued to pay strong attention to the company's talent management and succession planning for key positions.    

With the retirement of Guy Demuynck in 2016 and Doug Dunn in 2017, it was concluded that a candidate with a strong background in the technology sector would best complement the Supervisory Board moving forward. The Committee reviewed and concluded on the profile of the new member of the Supervisory Board. The Committee engaged with an external agency and conducted a thorough search and selection process that included candidates from the US East Coast and Europe. Interviews were held with several candidates which resulted in a recommendation by the Committee to the Supervisory Board.

The Committee resolved to recommend to the Supervisory Board to nominate for appointment at the 2017 General Meeting Michael Rhodin as member of the Supervisory Board for a term of four years. He will join the Audit Committee after the 2017 General Meeting. With the nomination of Michael Rhodin, the Supervisory Board is confident that it reflects the company’s positioning as a leading technology company and that its composition will remain well suited to perform its duties.  

The HR strategy within the company was shared with the Committee and quarterly updates were provided by the Head of HR. Topics which were shared in this respect were initiatives from management in view of career development, management and leadership, and compensation and benefits. Those initiatives all underpin the company's attention for talent management with the aim to attract, retain and develop TomTom talent. The Committee focused on the company's progress on its succession planning for key positions within the company. On a quarterly basis the Committee was updated on the recruitment status of vacant key positions and the leadership programme developed for talented senior leaders.

The Committee carried out a self-assessment of the functioning of the Committee. The composition of the Supervisory Board and its succession planning shall remain a priority for the Committee in 2017. The members of the Committee will also closely monitor the World Class Leadership Programme aimed at gaining a full overview on where potential leadership is within the organisation.

The Committee had two meetings with the Dutch Works Council in 2016.

4.2.8 Audit Committee Report

This report describes the main items discussed by the Audit Committee (Committee) during 2016.

The role and responsibility of the Committee as well as the composition and the manner in which it discharges its duties are set out in the Audit Committee Charter, which is available on TomTom’s corporate website: corporate.tomtom.com/audit-committee.cfm

During 2016, the Committee consisted of three members: Ben van der Veer (Chairman), Doug Dunn and Anita Elberse. With the appointment at the 2016 General Meeting of Jack de Kreij as a member of the Supervisory Board, effective 1 January 2017, the Committee consists per that date of four members.

COMMITTEE MEETINGS

The Committee met four times during the course of 2016, with an overall attendance rate of 75%. All four meetings were held prior to the publication of the financial results. All meetings were attended in full by the CFO and the Head of Internal Audit. The other members of the Management Board attended the meetings as required (for instance, where group risks and internal controls were discussed). The external auditor attended each of the four Committee meetings in full to report on its audit, quarterly procedures and management letter. The Committee and the external auditor also met separately, without the Management Board present, in order to facilitate free and open discussions. Other heads of departments (e.g. Treasury, Tax, Legal and IT) were invited when the Committee deemed it necessary and appropriate.

COMMITEE ACTIVITIES

The Committee assisted the Supervisory Board in its responsibility to oversee the system of internal controls and risk management, the effectiveness of the internal auditors, and the company's financing, financial statements and financial reporting process. In relation to the external auditor, the Committee monitored its performance and the effectiveness of the external audit process, as well as its independence.

Throughout the year, the Committee monitored and reviewed the quarterly financial results and full year financial statements as presented under IFRS, including the respective disclosures prior to their releases. Attention was paid to the (upcoming) transition to new accounting standards, revenue recognition, the valuation of goodwill and intangible assets, significant estimates, the tax position and the clarity of the rules for disclosure, as well as the company's compliance with accounting standards, the requirements of Euronext Amsterdam and other corporate governance, legal and regulatory bodies.

During all quarterly Committee meetings, updates were provided on the maintenance and effectiveness of the system of internal controls and risk management relating to strategic, financial, operational, and compliance matters. The company monitors its internal controls through a systematic approach, which is supported by the risk management process and the Internal Audit team. The Head of Internal Audit reports functionally to the Committee and administratively to the CFO.

The Committee further discussed items including the company's policies related to financing, cash and foreign exchange management. In relation to tax, the Committee discussed the status of ongoing tax audits, the innovation box ruling, 'Country by Country' reporting, tax risk management, and the tax strategy/policy. Regular updates were received by the Committee on TomTom's compliance programme (including whistle-blower reporting). The Committee was provided with quarterly updates on the company’s ongoing effort to maintain the appropriate level of a risk-based information security management.

The effectiveness of the Committee was reviewed as part of the 2016 overall evaluation of the Supervisory Board which confirmed that the Committee continues to function effectively.

The role and functioning of the Internal Audit function, including its independence, were regularly discussed and the internal audit plan was approved by the Committee. This plan considers the key risk areas of the business, important IT projects and information security, as well as the geographical spread of TomTom offices including local compliance (e.g. finance, HR and tax controls) and the core activities performed there. In consultation with senior management, Internal Audit selects the areas of the business to be audited during the year. Members of the Committee and the Management Board may at any time request Internal Audit to carry out an internal audit or a special consulting service. The follow up on the recommendations made by Internal Audit, were observed by the Committee. The Head of Internal Audit reported each quarter to the Committee.

Ernst & Young Accountants LLP (EY) was appointed as external auditor by the 2015 General Meeting for a term of three years up to and including the financial year 2017.

The 2016 external audit plan, including the scope and materiality applied, were approved by the Committee. The Committee evaluated the performance of the external auditor. Reviews and discussions were held between the Committee and the Management Board on the findings of the external auditor in its management letter and the actions taken by management to address the recommendations and observations made by the external auditor.

TomTom has a policy on external auditor independence, whereby the auditor is not allowed to perform non-audit services that would compromise its independence or violate any other requirements or regulations affecting its appointment as auditor. The external auditor may, however, provide non-audit services which do not conflict with its independence, subject to pre-approval of the Head of Internal Audit and, when above €25,000, also the Audit Committee.

The Committee reviewed the independence of the external auditor EY, taking into account qualitative and quantitative factors, and concluded that EY had sufficient objectivity and independence to perform the external audit function. EY confirmed its independence and compliance with TomTom's policy on auditor independence to the Audit Committee. A summary is provided below of services performed by EY, its network affiliates and the fees earned.

Table_7 Audit fees

(€ in thousands) 2016 % of total 2015 % of total
Audit - group 378 57% 360 61%
Audit - statutory 196 30% 155 26%
Tax compliance1 83 13% 76 13%
Other 6 1% 0 0%
TOTAL FEES 663 100% 591 100%
 
1. Tax compliance comprises foreign tax compliance services, including local tax filings and HR-related compliance services.

4.2.9 Financial Statements

The consolidated annual Financial Statements of the company for 2016, as prepared by the Management Board, have been audited by EY. The Financial Statements, the report and management letter of the external auditor were discussed extensively with the auditors by the Audit Committee in the presence of the Management Board, and by the full Supervisory Board with the Management Board.

The Supervisory Board is of the opinion that the 2016 Financial Statements of TomTom NV meets all requirements for correctness and transparency. The Supervisory Board has approved the Financial Statements for 2016. All members of the Supervisory Board and members of the Management Board have signed the Financial Statements for 2016 pursuant to the statutory obligations under article 2:101 (2) of the Dutch Civil Code.

The Supervisory Board recommends to the General Meeting to adopt the Financial Statements for 2016 and requests that the 2017 General Meeting discharges the members of the Management Board of their responsibility for the conduct of business in 2016 and the members of the Supervisory Board for their supervision in 2016. The Annual Report for 2016 is available at the company's offices on request and on TomTom's corporate website: corporate.tomtom.com/annuals.cfm.

The Supervisory Board would like to thank Guy Demuynck for his highly valued contributions to the company.

Further, the Supervisory Board would like to thank TomTom's shareholders for their trust in the company and its management. A special appreciation is made by the Supervisory Board to all employees and the Management Board for their continued dedication and commitment to the company.

Amsterdam, 8 February 2017

The Supervisory Board

Peter Wakkie

Doug Dunn

Ben van der Veer

Jacqueline Tammenoms Bakker

Anita Elberse

Jack de Kreij