07 Report of the Supervisory Board

Michael Kester took over as Chair, from Meerten Ubbens as of 1 October 2021; Mr Ubbens had reached the maximum term of 12 years and thus stood down from HZPC’s Supervisory Board. Michael has been part of the SB for seven years and is now retired from his international career with Syngenta. With Michael we will take stock of the financial year 2021-2022 and his first year as Chair of the SB.

“The past few years have taught us that we can only predict some of the challenges we might have to face. Two years after the coronavirus crisis, we are facing another crisis: the war between Russia and Ukraine. This has led to further shifts in the market and price developments for agricultural products. In good consultation with the Board and Supervisory Board, the management actively anticipated this and partly as a result, the 2021/2022 season ended with a very good result.

On behalf of the SB, I would like to thank the Board, the Executive Board and of course the employees of HZPC for their commitment, flexibility and the result achieved."

The conflict between Ukraine and Russia immediately raises the issue of whether you continue to supply countries such as Russia. This discussion, of course, also took place within the SB. HZPC has always had a clear vision: the people who live in conflict zones have not caused the problem and HZPC feels a responsibility to prevent hunger and, where possible, to carry on supplying the countries that are involved in conflicts. As the SB, we support this policy but also monitor developments with a critical eye. Unfortunately, there are countries in conflict areas whose banking systems are not functioning. As a result, HZPC would not be able to abide by general agreements about international trade and payment traffic. It is the task of the SB to ensure that HZPC does stick to these rules.

“In 2021-2022, every meeting had developments around the Business Transformation Program Aurora as the first topic on the agenda. There has been a massive focus on this area. And that is also vital. The successful implementation of Aurora will determine the success of HZPC in the future. This encompasses an IT component but primarily equates to a significant change in our working methods and collaborations within HZPC. The development and implementation of Aurora requires a lot of time and attention, in which it is important that everyone in the organisation is included, including the wishes and requirements to be able to work efficiently with Aurora. As the SB, we have engaged an external adviser who can view issues from a distance and flag up topics that we can then discuss with the Executive Board.”

“The new trading platform for HZPC certificates is principally a subject for the Board of the Association of shareholders. As the SB, we have a supervisory role and have considered the various risks, opportunities, costs and expenses. The new trading platform is a great step towards greater maturity within HZPC. It is a very positive development.”

"To answer this question, HZPC has embarked on a thorough process to develop its strategy for the next 15 years. This seeks answers to fundamental questions such as: where is the journey going? What is happening in the world? What emphases in the strategy do we choose? And what is realistic? These are interesting conversations. SB, Association Board and Executive Board contributed to this in a joint, informal session. After all, the importance of a solid strategy is great. It will help HZPC keep focus on those points where the company makes a difference, even in worse times."

“Over the past few years, there have been huge investments in Research & Development. The SB follows these with a critical eye. HZPC is now leading the field in research into diploid potatoes, a breakthrough technology the world is waiting for. HZPC has already taken huge strides. We are not there yet but there is a good chance that the first diploid varieties will be introduced in five years. Seed potatoes will not disappear entirely but markets that are tricky to access with seed potatoes will be brought within easy reach with this technology. HZPC is also able to introduce resistances much quicker and, in turn, reduce the levels of crop protection agents that are required. This offers genuine benefits to the world and contributes towards resolving the global food problem. That’s fantastic.”

“The SB is a sounding board for HZPC’s Executive Board. We work on strategies, choices and dilemmas without treading on the toes of the directors. This collaboration goes much further than the legal obligation to appoint a Supervisory Board and the duty for the Executive Board to provide information to the SB. The meetings are always constructive and exceptionally well prepared. Of course, we sometimes have heated debates but, in the seven years I've been part of this, I have never seen an issue that wasn't settled. There is an exceptional team of Supervisory directors and we have the luxury of having a very experienced executive team. This offers stability.” HZPC now operates in many countries and this places higher demands on financial supervision. For this reason, an Audit Committee has been set up. This consists of Cor Biemond and Irina Frolova (chair) and in 2021 - 2022 it dealt with topics such as bank financing, the audit plan of the new external auditor and the annual accounts." 

The SB of HZPC monitors and advises the Executive Board on company strategy, policy and objectives. In this, the aim is to ensure the continuity of the company and thus protect the interests of all stakeholders, including employees, growers, customers, legislators, and the public domain. As an employer, the SB also sets the remuneration for the Executive Board. The SB operates entirely independently of the Executive Board. As a shareholder, the Association HZPC appoints the members of the SB.

In 2021 - 2022, spread across the year, six meetings took place between the SB and Executive Board of HZPC. The Chair of the SB works with CEO Gerard Backx to prepare for the meetings. Prior to meetings between the SB and Executive Board, the members of the SB talk to one another. This financial year, the SB has also held two meetings of shareholders with the Board of Association HZPC.