Governance and culture

Organisation of management and supervision

Management Board and Supervisory Board

Alliander’s management and supervisory function are organised based on Dutch law in a so-called ‘two-tier’ system made up of a Management Board consisting solely of executive directors and a Supervisory Board consisting solely of non-executive directors. The Supervisory Board supervises and advises the Management Board and ensures an external presence in the company’s governance. The Supervisory Board acts as the employer of the Management Board. The two boards are independent of each other and are accountable to the General Meeting of Shareholders in respect of their performance. 

By-laws

The rules of procedure for the Management Board set out the Management Board’s responsibilities. The members of the Management Board have agreed on an allocation of specific duties and responsibilities while maintaining the collective responsibility of the Management Board as a whole. Additionally, it is the CEO’s responsibility to assign duties and responsibilities to various departments for the management of material impacts, risks and opportunities. 

Works Council 

Alliander has a Works Council at the level of Alliander N.V., on which the company’s employees are represented. The Works Council looks after the interests of all employees at Alliander and is involved in making the policy regarding the company and its employees. In 2024, the Works Council was made up of 13 members from all Alliander business units. After the Works Council elections in December 2024, the new Works Council has 14 members. The chair of Alliander’s Management Board acts as the Works Council’s discussion partner. 

Twice a year, the Works Council meets with a Management Board delegation to discuss the company’s general course of business, including developments, risks, the results and effectiveness of policy, targets and measures, based on the quarterly business review that Alliander compiles specifically for these consultations. Supervisory Board members Frits Eulderink and Gerard Penning were appointed to Alliander’s Supervisory Board after the Works Council exercised its ‘enhanced right of recommendation’. 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 and the Supervisory Board meet once a year to discuss predetermined specific focus points and topics. 

Gender and other forms of 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 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 appointment quota and target ratios (‘Diversity Act’). The Supervisory Board has adopted a diversity policy for the composition of both the Management Board and the Supervisory Board that gives consideration to the following elements:  

• 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;  

• a balanced age structure.  

In 2024, the Management Board consisted of three male members (CEO, CFO, CTO) and one female member (COO), meaning that women make up 25% of the Management Board, which falls short of the target for a balanced gender ratio. The gender diversity ratio was 3:1 in 2024. There is a good balance in terms of diversity of knowledge, background and experience and age on the Management Board. Further details on the composition of the Management Board are provided in the ‘Governance roles, Management Board and Executive Committee’ paragraph of the ‘Corporate governance’ section and in the ‘Management Board’ paragraph of the ‘Personal details’ section of Alliander’s annual report. 

In 2024, the Supervisory Board was made up of two men (40%) and three women (60%), meaning that the target gender ratio was met. The gender diversity ratio was 2:3 in 2024. The Supervisory Board has a sufficiently diverse composition, both in terms of gender ratio and in terms of background, experience and age.  

Independent directors 

All Supervisory Board members are 100% independent under the definition from the Dutch Corporate Governance Code. One of the Supervisory Board members is not independent within the meaning of the Dutch Electricity Act of 1998 and the Dutch Gas Act. The other Supervisory Board members are independent within the meaning of these Acts, meaning that the majority of Supervisory Board members do not have any direct or indirect connection with an organisational entity that produces, procures or supplies electricity and/or gas. 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 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. Further details on the composition of the Supervisory Board are provided in the ‘Governance roles, Supervisory Board’ paragraph of the ‘Corporate governance’ section of Alliander’s annual report. 

Before accepting any kind of position outside of Alliander, Management Board members must report it to the Supervisory Board. A member of the Management Board needs the Supervisory Board’s approval to accept a seat on a supervisory board or another paid position, including positions of an advisory or supervisory nature. All board members comply with the cap on the number of supervisory directorships someone can hold, as stipulated in Book 2 of the Dutch Civil Code. In accordance with the Code, every (potential) conflict of interest of a director must immediately be reported to the Supervisory Board chair and the other Management Board members. In 2024, there were no conflicts of interest involving a Management Board member.

Other positions of Management Board and Supervisory Board members are discussed at a Supervisory Board meeting at least once a year.  

Sustainability 

The Management Board is responsible for integrating the sustainability agenda into the business strategy and monitoring sustainability performance through the Planning and Control Cycle. This includes risk awareness. The Management Board is responsible for implementing all policies outlined in the sustainability statement. 
Sustainability is on the Supervisory Board’s agenda on a quarterly basis. In addition, the Supervisory Board and, more specifically, the Audit Committee are kept informed of developments in sustainability reporting. Both the Management Board and the Supervisory Board possess the pertinent expertise and skills, or have access to specialist knowledge, to understand, assess and make strategic decisions on sustainability topics. They make sure of this by engaging external expertise, such as specialist consultants, and by conducting self-evaluations to determine whether additional knowledge or skills are needed. 

The management’s role in governance processes 

Management responsibility for supervising the quality of the management of our top risks also consists of three layers.     

• The Alliander Resilience Committee has the CFO as its chair and issues recommendations on privacy and security, compliance, risk acceptance, risk profile, external risk reporting requirements, exceptions of a temporary nature or events that diverge from the applicable risk policy and risk acceptance guidelines. The Committee also discusses risk reports and monitors and advises on the follow-up actions arising from the internal and external audits. Finally, it also promotes the embedding of risk management and internal control processes within Alliander’s organisational units and value chains.  

• Alliander has created an Executive Committee (ExCo) to support the Management Board in the performance of its duties and responsibilities. The ExCo also provides direction for the execution of Alliander’s strategy. The ExCo is made up of four Management Board members who were appointed by the General Meeting of Shareholders as required under the articles of association, plus two Management Board members who were not appointed under the articles of association, namely the Chief Human Resources Officer (CHRO) and the Chief Digital Officer (CDO). The ExCo manages attitudes and behaviours regarding risk management and internal control. The ExCo discusses the portfolio of top risks every six months, and specific risks are frequently on the agenda for their meetings. If necessary, the ExCo initiates implementation of additional measures. Moreover, the ExCo monitors the risk management and control system, which it regularly tests against the expectations of and developments at our key stakeholders. The CHRO also takes part in meetings of the Works Council and the CEO.

• The Supervisory Board supervises the design and effectiveness of the risk management and control system. The Audit Committee discusses the portfolio of top risks every six months, issuing a summary of its deliberations to the Supervisory Board. The Management Board provides an explanation of the risk report, which the Audit Committee takes on board in its supervision. Proposals for adjustments to the risk management policy are put to the Audit Committee before being implemented. Governance processes are highly geared towards controlling risk. The introduction of the CSRD has led to a broadening of the risk control scope to include sustainability risks.

Defining objectives and monitoring progress 

General responsibility for sustainability lies with the Management Board, which is also the body that makes all the decisions about strategy and objectives. The Management Board’s focus is on overarching objectives. On an operational level, the Management Board and senior management focus on developing and achieving the more detailed sustainability objectives. The sustainability objectives defined are aligned with the overarching objectives and strategy. The CSR manager reports to the Corporate & Social Affairs director and coordinates the implementation and disclosure of the strategic initiatives. Responsibility for managing sustainability initiatives and achieving objectives lies with the relevant business units and support functions. This is how the effectiveness of sustainability measures is monitored.     

For the governance of the company, we use the Objective, Goals, Strategies and Measures (OGSM) method with qualitative and quantitative objectives and indicators to monitor progress on strategic sustainability initiatives. The corporate dashboard is reviewed by the Management Board and discussed with the Supervisory Board on a quarterly basis.  

The Management Board and Supervisory Board are aware of the importance of having knowledge, skills and experience in the area of sustainability represented on their respective boards. The backgrounds of the individual Management Board and Supervisory Board members differ and, as a result, so do the qualities indicated above. Depending on the needs and topics Alliander is involved in, we organise deep-dive sessions. In 2024, one of these deep dives focused on CSRD implementation and the associated disclosure requirements. 

Information on sustainability topics 

At Alliander, we manage our material impact by applying a strategic allocation of resources and effective control practices. In order to do that, we have made funds and resources available in various domains: 

• Financial investments: an annual budget for sustainability initiatives. 

• Human resources: teams and jobs focused specifically on sustainability. 

• Technological resources: systems and software used to monitor and manage impacts.  

Alliander runs an annual budget and business plan process. Based on an environmental analysis of trends and developments, an internal analysis of the organisation and the performance delivered, the budget and business plan process gives the Management Board the insights they need to recalibrate the business strategy. Next, the organisation makes the annual plans and incorporates them into the OGSM method that forms the basis for Alliander’s decision-making and ability to achieve objectives. The budget and business plan process aligns the objectives for the short, medium and long term for both financial and non-financial KPIs. Integration of the defined impacts, risks and opportunities (hereinafter referred to as ‘IROs’) into the current planning and control cycle will be further optimised.   

Sustainability-related performance in incentive schemes 

Management Board members do not receive variable pay. They receive a fixed gross annual salary, including holiday allowance. The fixed gross annual salary of Management Board members does not exceed 130% of the limit under Dutch legislation on high income earners (WNT). The fixed gross annual salary is adjusted annually to the current WNT remuneration limit. Sustainability is an essential part of the objectives that Alliander works towards and against which the Management Board’s performance is appraised. There is no direct link to directors’ remuneration.  

Statement on due diligence 

Due diligence is the process that sees Alliander identify, prevent and mitigate (potential) negative impacts and render account on its response to the impacts of its activities on people and the environment. These impacts comprise negative impacts of Alliander’s own activities and those in the upstream and downstream value chain. Given below is the overview of how the core elements of the due diligence process are incorporated into the sustainability statement.   

Risk management and internal controls over sustainability reporting   

Risk management is the deliberate handling of uncertainties that can have a negative impact on the achievement of the strategy as adopted by the Management Board. Uncertain events may also have a positive effect on strategy execution. While this will be reflected more in the new risk management framework, the organisation’s focus for now is on controlling risks with a negative effect. An effective risk management and internal control system is therefore important. This system is updated in line with internal and external developments. We apply the ‘three lines’ model for risk management purposes. Each line of defence has its own responsibility in the management and control process:  

• The first line is responsible for identifying, managing and monitoring the risks within its processes and for an effective risk management and control system. The first is responsible for defining the quantitative data points and safeguarding their quality, as reported in the sustainability statement. 

• The second line supports, advises, coordinates and sets frameworks to ensure that the management genuinely takes responsibility. This line therefore provides additional assurance within Alliander. In the context of the CSRD, the DMA is drawn up from the second line. The same goes for accountability in compliance with the EU taxonomy. The second line decides which data points to disclose.  

• The third line provides additional assurance about the question whether the first and second lines can jointly manage the risks, so that the organisational objectives are achieved. The third line gives an objective and independent opinion on this matter, including suggestions for possible improvements. The third line operates objectively and independently from all other parts of the organisation. The third line selects the quantitative data points for the sustainability statement.  

We are currently integrating the topic of sustainability into the organisation's risk management system. One way we are doing this is by including sustainability in the standard scope of the risk sessions we hold at various levels in the organisation (including the ExCo and the MTs of organisational units). We classify risks based on the Alliander risk matrix. The risk matrix comprises six impact scales based on corporate values, of which sustainability is one. After they have been identified, sustainability risks are prioritised in the same way as other identified risks. We record and track identified and classified risks and associated control measures in the Alliander Management System (ABS). Risks are part of the analysis of impacts, risks and opportunities. The relevant impacts, risks, opportunities and associated actions are described for each subtopic. These are explained for the relevant subtopics. 

In addition, there are various other actions through which we manage our risks and periodically report on our risks, such as the planning and control cycle, the risk management framework, the business control framework, the quarterly ‘in control’ update and the Alliander risk report. The risk report and the quarterly ‘in control’ update are prepared by the Risk Management & Compliance department and approved by the Management Board. We are working towards making sustainability risks part of existing processes and reporting.