Report of the Supervisory Board

The Supervisory Board is primarily tasked with supervising the policy pursued by the Management Board and the general course of business within Alliander. It also fulfils the role of adviser to and employer of the Management Board. In this report, the Supervisory Board comments on how it fulfilled its role as supervisor, adviser and employer in respect of the Management Board in 2024.  

As the Supervisory Board, we closely supervise completion of Alliander’s huge and complex task, and also the management of the organisation’s intended growth. Guided by the strategy, where the focus in 2024 was on implementation, flexibility and communication, further steps were taken in achieving the objectives. At the same time, the Supervisory Board also sees what this growth demands of the organisation and the impact this has on customers. In 2024, the Supervisory Board had numerous strategic discussions with the Management Board and fulfilled its supervisory role in this complex and changing environment, with a keen eye on safety.   

Safety 

Safety has the highest priority at Alliander and is a subject to which the Supervisory Board devotes considerable attention during its meetings. In order to raise safety awareness and strengthen the safety culture, Alliander uses the Safety Culture Ladder, formerly known as the Safety Ladder. The Supervisory Board is pleased that Alliander has achieved rung 4 on the Safety Culture Ladder for the second year in a row. Despite Alliander maintaining its excellent position on rung 4, the Supervisory Board considers the number of lost-time incidents to be too high. The Supervisory Board reached out to the Management Board to discuss what caused this increase and what improvement measures are being taken. One incident was serious in nature. For more information on this incident, see the ‘Safe working practices’ section of the management report. The Supervisory Board was immediately notified of the details of this workplace accident and was closely involved in the follow-up by the Management Board. This incident illustrates once again that safety and safe working practices require our constant attention.  

Strategy 

Progress on the execution of Alliander’s strategy is a key item on the agenda for every meeting. On the one hand, strategy execution progress is monitored on the basis of quarterly reports on Alliander’s operational and overall performance, and on the other hand, specific strategic topics are discussed in greater detail at every meeting. For example, the strategy pursued when it comes to completing more work (operational performance), the heavier load on and more efficient use of the power grid, customer service, reducing demand for transmission capacity and the customer and digitalisation strategy were discussed at length.  
A key building block in 2024 was to further bolster the management focus on achieving targets. In line with this, Alliander’s 2030 target was further substantiated in quantitative terms based on current and planned change initiatives and production planning in the various value chains.

The Supervisory Board and Management Board’s annual strategy day is a time for reflection and delving into issues. The focus for the 2024 edition of this day was on boosting Alliander’s operational performance through digitalisation and automation. One of the topics discussed was the use of integrated control in operations and various demos were used to show the value of digitalisation for better utilisation of the power grid. The Supervisory Board found the chosen examples very tangible with a clear contribution to operational performance and strategy execution. 

Financing the energy transition 

Increasing investment to fund the energy transition is, on the one hand, driving up tariffs and, on the other, generating a negative impact on Alliander’s financial position. The Supervisory Board sees that Alliander has responded to this by taking several initiatives to strengthen its financial position. The Supervisory Board considers it necessary to update the dividend policy from both a financial and a social perspective. At the Annual General Meeting of Shareholders (AGM) on 17 April 2024, Alliander and the shareholders agreed that they would jointly review whether the dividend policy is still appropriate to Alliander's task. In May 2024, the Management Board initiated discussions on this in the Meeting of Major Shareholders. whereby the major shareholders engaged counsel from KPMG (financial adviser). The Supervisory Board received frequent updates on the progress of these discussions and advised the Management Board. After an intensive process and with respect for each other’s positions, agreement on a dividend policy update was reached in early 2025. The specifics of this dividend policy update will be explained at the AGM of 16 April 2025.

In the fall of 2024, the Netherlands Authority for Consumers and Markets (ACM) announced that it is working on a new regulatory method it will be using to set tariffs for network operators from the year 2027. The ACM’s chosen regulatory method is one where the costs incurred by network operators to expand, upgrade and adapt power and gas grids will be assessed in advance. The ACM currently only does this afterwards. The Supervisory Board agrees with the ACM’s view that the method to be adopted must not prevent network operators from making the investments needed for the energy transition in a timely manner and will continue to closely monitor this issue.

Financial reporting 

In 2024, the Management Board submitted details of actual financial performance to the Supervisory Board every quarter, comparing the actual figures to the budget for 2024, the forecast for 2024 and results achieved in 2023. Topics covered included the increasing investments, the rising negative cash flow and the growing need for financing. The quarterly reports also provided information to enable the Supervisory Board to monitor progress on achieving the business objectives. In addition, the 2023 annual report was discussed, including the accompanying audit report, and approved. The external auditor was also present during the discussions of the annual and interim reports. The Supervisory Board also discussed and approved the 2025–2029 business plan, including the 2025 budget. The Supervisory Board’s Audit Committee carried out intensive preparatory work on all these matters. 

Internal risk management and control systems 

The Supervisory Board (and the Audit Committee in particular) discussed the Internal Audit department’s findings and recommendations from the internal audits as well as the status of actions taken in response to findings from previous audits. Furthermore, the management letter from external auditor PwC was discussed with the Audit Committee and the Supervisory Board respectively, in the presence of PwC. Based on the activities performed, PwC concluded that Alliander’s internal controls are in principle sufficiently effective. No (new) significant shortcomings were identified in the internal control system. PwC’s main findings relate to the progress and challenges regarding CSRD compliance and the Business Control Framework, and then the recording of some controls in particular. The Management Board acknowledges the auditor’s findings and will initiate action to address them. In addition, the Supervisory Board discussed the company’s main risks (including control measures), as well as the comprehensive IT, Privacy and Security risk report. The Supervisory Board concludes that Alliander has a robust control framework, which operates effectively and is continuously improved. 

Sustainability 

Social, economic and financial sustainability, the SDGs and impact measurement are an integral part of Alliander’s strategy and day-to-day operations. Stakeholders increasingly value the sustainable character of Alliander. More information on sustainability plans and initiatives can be found in the report of the Management Board. The Supervisory Board supports these initiatives that, in its opinion, contribute to long-term value creation in the area of sustainability.  

Being a public interest company, Alliander is under an obligation to comply with the CSRD from the 2024 annual report onwards. The Management Board briefed the Supervisory Board on preparations for compliance with CSRD legislation and the impact on reporting and accountability. A key element of this was the double materiality assessment that was performed to identify material topics. The Supervisory Board assisted the Management Board with advice on the double materiality assessment.

In addition, the Supervisory Board approved the issue of a subordinated perpetual bond loan of €500 million and a green bond loan of €750 million in 2024. The funds from these loans went towards financing our sustainable (head) offices, the purchase of smart meters and further investments in the power grid. Raising green financing is in keeping with Alliander’s strategy for sustainable operations.  

The Supervisory Board’s role as an employer 

In 2024, the Supervisory Board’s Selection, Appointment and Remuneration Committee was once again charged with annually assessing the performance of the individual members of the Management Board and reporting back to the Supervisory Board. This performance review included a discussion of progress made relative to collective and individual goals, and personal development. The Supervisory Board’s role as an employer also includes succession planning for the Management Board members. Ensuring that board member successions go smoothly according to the succession plan is a key task for the Supervisory Board in the context of ensuring Alliander's continuity. The succession plan for the Management Board and the top management level below the Management Board is reviewed on an annual basis. This practice gives the Supervisory Board a good understanding of the potential and capabilities of top management within Alliander.  

Other topics 

In addition to the topics highlighted above, the Supervisory Board addressed the following issues: 

• New laws and regulations relevant to Alliander. In late 2024, for example, the Senate of the Netherlands passed the Energy Act and the Heating Transition (Municipal Instruments) Act, while also approving abolition of the statutory feed-in rate. Additionally, the ACM adopted a broad set of measures intended to help network operators and companies ease grid congestion.

• Creation of the Executive Committee.

• The results of the 2024 Central Employee Barometer.

• The statutorily mandated sale of the Randmeren HV subgrid to TenneT. The transfer of this subgrid is expected to be completed in early 2025.  

• Approval of a change to Alliander's financial policy.

• Approval of the renewal of the Management Board’s authority to issue ordinary shares and to limit or exclude the statutory pre-emptive right of existing shareholders in the issue of shares in connection with a possible conversion of the €600 million reverse convertible hybrid bond loan arranged in 2021. 

• Approval of the 2025 Internal Annual Audit Plan.

About the Supervisory Board 

Composition of the Supervisory Board and retirement schedule  

There were no changes in the composition of the Supervisory Board in 2024. At the AGM of 17 April 2024, the shareholders reappointed Annemarie Jorritsma, after two four-year terms, to a third and final term of a maximum of two years, in line with the Dutch Corporate Governance Code. The Supervisory Board is of the opinion that, given her knowledge, experience and expertise, she has proven to be well capable of fulfilling the role of chair of the Supervisory Board over the past eight years. Alliander’s energy transition challenges are extensive and complex. In particular, the need to scale up in terms of both investments and the number of employees poses a major challenge for Alliander. Preparations for the intended scale-up, which include making choices that give direction to this process, are underway and will show results now and over the next two years. This requires strong leadership, both from the Management Board and from the Supervisory Board, especially from the chair. 

In the second half of the year, a Supervisory Board selection committee started the recruitment and selection process for Annemarie Jorritsma’s successor. The Supervisory Board has engaged an executive search firm for this recruitment. Both the Committee of Shareholders and the Works Council were informed of the progress of the recruitment and selection process in the interim. The recruitment and selection process is expected to be completed in early 2025.   

The following retirement schedule applies to the Supervisory Board. 

The personal details, principal and additional positions of the members of the Supervisory Board are included in the ‘Supervisory Board’ paragraph in the ‘Corporate Governance’ section. 

Procedure and member attendance  

The Supervisory Board met on eight occasions in 2024. Besides the five ordinary meetings, there were three additional meetings. During the first half hour of each regular Supervisory Board meeting, the Supervisory Board meets on its own. The other participants in the Supervisory Board meetings are Management Board members and, by invitation, the external auditor and members of management. Outside the meetings, the Management Board briefed us on relevant topics and there was also regular contact in the interim, both between the Supervisory Board members themselves and between Supervisory Board and Management Board members. The secretary prepared the Supervisory Board meeting agendas, liaising with the chairpersons of the Management Board and the Supervisory Board. 

The Audit Committee met six times in 2024, and the Selection, Appointment and Remuneration Committee held four meetings. Please see below a list showing the attendance of individual members at the various meetings.  

Independence, conflicts of interest and other positions  

The Supervisory Board’s articles of association and by-laws contain provisions about the independence of Supervisory Board members. The composition of the Supervisory Board is such that the members are able to operate independently and critically vis-à-vis one another, the Management Board and any particular interests involved. All Supervisory Board members operate independently within the meaning of the best practice provisions from the 2022 Dutch Corporate Governance Code.

Supervisory Board members give the Supervisory Board advance notice of other positions. None of the Supervisory Board members holds more than the maximum number of supervisory positions with large Dutch companies or major foundations. In accordance with the Dutch Corporate Governance Code, every (potential) conflict of interest of a Supervisory Board member must be reported to the chair of the Supervisory Board immediately. In 2024, one conflict of interest was reported by a Supervisory Board member. Under the definition of ‘independence’ from the Electricity Act and Gas Act, Frits Eulderink is not independent, because he also sits on the Supervisory Board of Energie Beheer Nederland. All other members of the Supervisory Board are independent under the definition in the Electricity Act and Gas Act. The Supervisory Board concluded that Frits Eulderink has a (potential) conflict of interest with respect to Alliander’s future heating company due to his position as chair of the Supervisory Board of Energie Beheer Nederland. Therefore, he did not attend deliberations on this topic and did not receive any information about it. The Supervisory Board confirms that best practice provisions 2.7.3 and 2.7.4 of the Dutch Corporate Governance Code have been followed.  

Diversity 

Both the Management Board and Supervisory Board recognise the added value of diversity in a broad sense and gender diversity in particular. The current diversity policy applicable to the Management Board, ExCo and Supervisory Board was written with this in mind. Alliander is subject to the provisions on the balanced allocation between men and women of seats on the Management Board and Supervisory Board pursuant to the Dutch Act on the appointment quota and target ratios (‘Diversity Act’). The diversity policy for the composition of the Management Board, ExCo and the Supervisory Board gives consideration to the following aspects of diversity: 

• a balanced gender ratio with a target percentage of at least 33% women and at least 33% men; 

• a complementary composition in terms of experience and professional background (the areas of knowledge and experience for the Supervisory Board are included in the Supervisory Board’s Profile); 

• a balanced age structure. 

As at year-end 2024, the Management Board was made up of three male members and one female member, putting the gender ratio at 75% male to 25% female, which falls short of the target for a balanced gender ratio. At year-end 2024, the Executive Committee was made up of four men (67%) and two women (33%), which complies with the target gender ratio. At year-end 2024, the Supervisory Board was made up of four men (40%) and three women (60%), which also complies with the target gender ratio. When future vacancies on the Management Board, the Executive Committee and the Supervisory Board are filled, the basic principle is that the diversity policy should be implemented further where possible. For each vacancy, we discuss what is desired in the context of diversity.  

Annual evaluation  

The Supervisory Board conducts an evaluation every year, looking at the performance of the Supervisory Board itself, as well as that of individual members and the various committees, while also evaluating collaboration with the Management Board. This evaluation is performed once every three years on average, with help from an external party. This was the case for the self-evaluation in 2024. Prior to the evaluation, all Supervisory Board and Management Board members, the Corporate Secretary and the secretary were interviewed. Each of them also completed a comprehensive questionnaire. The outcomes of the questionnaires and individual interviews were presented to the Supervisory Board and discussed, and the main outcomes were shared with the members of the Management Board. The general picture painted by the evaluation for 2024 is a positive one. The Supervisory Board members have good working relationships between them. Commitment is high, as is mutual respect and trust. The Supervisory Board is generally satisfied with its own performance and the performance of the various committees. Mutual understanding and dialogue with the Management Board is open, professional and good, which both the Supervisory Board and the Management Board greatly appreciate.  

The self-evaluation further revealed that the Supervisory Board is positive about the further increased focus on intended result and the quantification in the notes to the results achieved and to be achieved. A number of focus points were also discussed. The size of the task facing Alliander has led to an increase in the number and depth of issues to be addressed. Sharing dilemmas in this regard enables focused dialogue on these issues. This is an important focus point, not only given the increased dynamics in and connections between topics, but also given the increased time commitment of Supervisory Board members.

Audit Committee 

The Audit Committee met on six occasions in 2024. In accordance with the governance agreements, the CFO, the external auditor PwC, the Corporate Control director and the Internal Audit manager took part in all meetings. Depending on the agenda, internal specialists also attended some meetings and reported on relevant topics in their capacity as experts. In addition, the chair of the Audit Committee talked regularly with the CFO, the external auditor and the Internal Audit manager outside the meetings.  

Topics discussed by the AC in 2024 included the 2023 financial statements, the 2024 half-year report, the regular quarterly reports, risk management, the 2025-2029 business plan (including the 2025 budget), the Internal Annual Audit Plan and reports submitted by the Internal Audit department and the audit plan for 2024 (the audit plan for the auditing of Alliander’s financial statements for the 2024 financial year) and reports submitted by the external auditor. In 2024, PwC took over from Deloitte as Alliander’s external auditor.  
In addition, the Audit Committee focused on matters such as taxation, the proposal to pay an interim dividend for the 2024 financial year following the sale of Kenter, amendments to the financial policy, the financial forecasts for the 2025-2034 period, the financing plan for 2024 and the first quarter of 2025, progress made on CSRD compliance, integrity and fraud, risks in the areas of IT, security and privacy, the transfer of a high-voltage grid to TenneT and the future regulatory method from 2027. Relevant topics requiring the approval of the entire Supervisory Board were submitted to the complete Supervisory Board along with a recommendation drawn up by the Audit Committee. 

Selection, Appointment and Remuneration Committee 

The Selection, Appointment and Remuneration Committee (SAR Committee) met on four occasions in 2024. In addition to the SAR Committee members, the CEO and Corporate Secretary also attended these meetings. 

In 2024, the SAR Committee centred on matters such as the outcomes of the 2023 talent management review, the creation of an ExCo, remuneration of Supervisory Board members, the Supervisory Board’s self-evaluation and succession planning. The HR dashboard was also discussed. This dashboard presents topics such as FTE development, sickness absence, age and the gender ratio. The committee additionally carried out preparatory tasks for the Remuneration Report. The SAR Committee chair is also part of the selection committee tasked with finding a successor to Annemarie Jorritsma. The chair of the AC also sits on that committee. They were closely involved in the search process and took part in selection interviews. Moreover, acting for the Supervisory Board, the SAR Committee conducted the annual individual performance reviews with members of the Management Board. 

Relationship with the Works Council 

The Supervisory Board feels it important to maintain strong contacts with the Works Council; this contact gives us a feeling for what is really going on in the organisation. On two occasions in 2024, a delegation from the Supervisory Board met with the Works Council and the Management Board for a so-called Article 24 ‘Works Councils Act’ meeting. The members of the Supervisory Board who were appointed on the basis of the Works Council’s enhanced right of recommendation have regular contact with the Executive Team of the Works Council. The Works Council was also given the opportunity to make recommendations regarding the (re)appointment of Supervisory Board members.  
In June, the Supervisory Board once again held its annual meeting with the Works Council. We discussed Alliander’s growth and ever-increasing digitalisation, focusing specifically on workload, the onboarding of new employees, internationalisation of our workforce and the role of artificial intelligence (AI). The Supervisory Board considers its consultations with the Works Council to be open, constructive and valuable. Elections for Alliander’s employee participation body were held in late 2024. We would like to take this opportunity to thank the departing Works Council members for their hard work and we look forward to meeting the new Works Council members.  

Relationship with shareholders 

The Annual General Meeting of Shareholders (AGM) is one of the opportunities for contact with the shareholders, and is when the Supervisory Board renders account on its performance of its supervisory duties. All the members of the Supervisory Board attended the AGM on 17 April 2024. In addition to rendering account regarding the supervisory activities, this is also an excellent opportunity for an informal exchange of thoughts and ideas. At the AGM, the 2023 annual report was discussed, the financial statements and dividend for 2023 were adopted, the Management Board and Supervisory Board members were granted discharge from liability for their respective duties in 2023 and Annemarie Jorritsma was reappointed as a Supervisory Board member. Furthermore, shareholders were advised of the payment of a special dividend (in the form of an interim dividend) for the 2024 financial year on account of the sale of Kenter.   
As per usual, the Management Board also had regular informal meetings with the major shareholders in 2024, outside the formal meeting of shareholders. An important topic of discussion was the dividend policy update. Other topics of discussion were grid congestion, the development of the new Heating Act and its impact on Alliander, the transfer of a high-voltage grid to TenneT and developments in laws and regulations. The Supervisory Board was consistently kept informed in respect of these topics. 
In addition, the SAR Committee consulted with the Committee of Shareholders regarding the implementation of the Management Board remuneration policy. The Committee of Shareholders was also given the opportunity to make recommendations regarding the (re)appointment of Supervisory Board members.  
The Supervisory Board feels positive about the good relationship and constructive dialogue with the shareholders during the past year.  

Advice to shareholders regarding the financial statements 

The 2024 financial statements were prepared by the Management Board and signed by the Management Board and Supervisory Board. PricewaterhouseCoopers Accountants N.V audited the financial statements, attended the Supervisory Board meeting during which the audit of the financial statements was discussed, and issued an unqualified audit opinion. The independent auditor’s report is included in this annual report under ‘Other Information’.  

The Supervisory Board will present the 2024 financial statements and the dividend proposal for the 2024 financial year to the AGM on 16 April 2025 and request their adoption. A proposal will furthermore be made by the Supervisory Board to the AGM to discharge the members of the Management Board from liability for the management policy pursued, and to discharge the members of the Supervisory Board from liability for their supervision.   

Word of appreciation 

Alliander can look back on another intense year. A year during which great strides were made in the energy transition under challenging conditions. The Supervisory Board is proud of the results achieved and expresses its thanks to all employees, management, the Works Council and the Management Board for their dedication, professionalism and effort. Additionally, the Supervisory Board would also like to thank the shareholders for their support and trust in Alliander.  

Supervisory Board, 3 March 2025 

Annemarie Jorritsma-Lebbink (chair)
Frits Eulderink
Marinka Nooteboom
Thessa Menssen
Gerard Penning