The Supervisory Board hereby offers the 2019 annual report of Bouwinvest Real Estate Investors B.V. (Bouwinvest), which includes the financial statements for 2019. The Bouwinvest Executive Board of Directors prepared the annual report, while Deloitte Accountants B.V. has audited the financial statements and provided an unqualified auditor’s report (see the auditor’s report on page 67). The Supervisory Board discussed the annual report with the Executive Board of Directors, in the presence of the external auditor. Partly on the basis of these discussions, the Supervisory Board concluded that the annual report meets all the rules and requirements in the field of governance and transparency. The report provides an accurate and complete picture of the results, risks and events that the Supervisory Board oversees.
The financial statements will be submitted to the Annual General Meeting of shareholders (AGM) for adoption on 22 April 2020, as part of the 2019 annual report. The Supervisory Board proposes that the meeting adopt the financial statements and add the profit, as proposed by the Executive Board of Directors, to Bouwinvest’s shareholders’ equity. The Supervisory Board proposes that the AGM discharge the Executive Board of Directors for their management and the Supervisory Board for their supervision of said management, and that the AGM adopt the financial statements.
The previous Supervisory Board resigned on 18 April 2019. After announcing its intention to resign, the Supervisory Board in question only dealt with any pending matters through to 18 April 2019.
Following the appointment of the new Supervisory Board, for the Supervisory Board 2019 was largely dominated by the structuring of the board and getting acquainted with the company and its main stakeholders. The board went through an extensive induction programme, gaining a good understanding of Bouwinvest and of the activities Bouwinvest carries out as the fund manager for Bouwinvest’s Dutch funds and as an international real estate investment manager. In that context, the supervisory directors had extensive discussions with the shareholder, stichting Bedrijfstakpensioenfonds voor de Bouwnijverheid (bpfBOUW) and other Bouwinvest stakeholders. Last year also saw regular consultations between the chair of the Supervisory Board, the chair of Audit, Risk & Compliance committee, the chair of the board- and the Managing Director of the Executive Office of stichting Bedrijfstakpensioenfonds voor de Bouwnijverheid and the Bouwinvest CEO and CFRO.
The newly composed board also talked to the Works Council.
Business plan 2020 - 2022
The Supervisory Board discussed the draft Business plan 2020 - 2022. The Business plan comprises the strategy, including the financial and non-financial targets and the parameters for the implementation of same. Client focus, sustainability and internationalisation are the main pillars of Bouwinvest’s growth strategy. This will also require the continued development of and adjustments to the organisation, which now has to continue its growth to the ‘next level’. This includes specific attention for the client organisation, risk management and governance. KPMG is providing the organisation with support in the continued development and the implementation of risk management systems. New investors also make new demands on fronts such as reporting, communications and governance. Effective client services are an important part of this. In this context, the Supervisory Board also advised the Executive Board of Directors on the structuring of the Client Management department and was closely involved in the implementation of this initiative. We will continue with the fleshing out of the Strategic plan 2020 – 2022 in early 2020 and the Supervisory Board will ensure that the consequences of the recent COVID-19 pandemic is taken into account as much as possible.
In the execution of its supervisory tasks, the Supervisory Board also devoted specific attention to sustainability. The board appreciates the fact that Bouwinvest continues to devote itself to improving the sustainability of its Dutch and international investments. The board endorses the importance of the further internationalisation of the organisation, clients and the real estate portfolios, and monitors the developments and initiatives on that front.
The Executive Board of Directors reports to the board regularly on the progress of the strategic plan. In that context, the board discussed the quarterly reports, the fund reports and the internal audit reports. At the board’s request, Bouwinvest has now expanded its reporting, giving the board the opportunity to form a complete picture of the stakeholder value and the finances of the Bouwinvest management company.
In 2019, the organisation invested a great deal in improving its IT systems and operating processes, which led to an improvement in the standard processes. Bouwinvest expects to make increasing investments on this front in the year to come, in connection with the continued growth of the organisation. The board endorses these investments and their importance for client services and performance. The board also discussed and approved the new procurement policy.
In January 2019, Bouwinvest opened an office in Sydney, and expects to open an office in New York in the first quarter of 2020. The opening of these new offices is another step in the internationalisation of Bouwinvest’s activities and local presence puts the company in a stronger position in both the North American market and Asia-Pacific markets.
The board discussed the developments on the real estate markets in the Netherlands, Europe, North America and the Asia-Pacific region. The board discussed the fund plans for the Dutch Funds and the mandate plans for the international portfolios. In that context, we also devoted attention to the funding of the Dutch funds, partly in light of the fact that the anchor investor, stichting Bedrijfstakpensioenfonds voor de Bouwnijverheid (bpfBOUW) has reached its target allocation for Dutch real estate investments in Bouwinvest’s Dutch funds. More specifically, we discussed the funding gap of the Bouwinvest Residential Fund. We discussed the backtesting procedure for the international investments.
In November, Stichting Bedrijfstakpensioenfonds voor de Bouwnijverheid closed new asset management agreements with Bouwinvest for the management of its international real estate portfolios in Europe, North America and the Asia-Pacific region. These agreements provide a good basis for the continued growth of the international real estate portfolio under Bouwinvest’s management. The Supervisory Board discussed these agreements.
In mid-2019, stichting Bedrijfstakpensioenfonds voor de Bouwnijverheid appointed Russell Investments as fiduciary advisor. The board discussed the role and working methods of the fiduciary advisor. A point of attention is the prevention of any conflict of interests, especially with regards to the international real estate investments that will be executed by both Bouwinvest and Russell Investments. Additional agreements will be reached on this front.
Approval of investments
In accordance with its own regulations, the Supervisory Board is supposed to approve decisions of the Executive Board of Directors with respect to investments above certain threshold amounts. In 2019, the board decided to approve investment proposals for both Bouwinvest’s Dutch funds and for the international portfolios. The Supervisory Board is still considering how it will supervise investments in the future. For the international investments, the supervision will be in combination with the fiduciary advisor bpfBOUW has appointed for this portfolio, which advises the bpfBOUW board on the set-up and execution of the real estate investment management.
All the members of the Supervisory Board were present at the meeting of the board in its new composition.
Audit, Risk & Compliance committee
Until 18 April, the audit committee consisted of the members Jan van der Vlist and Roel Wijmenga. As of 15 August 2019, the committee, under the new name Audit, Risk & Compliance committee, consists of the members Jos van Lange (chair) and Wendy Verschoor.
In 2019, the committee met once prior to the resignation of the Supervisory Board. The collective meeting of the board discussed the annual results and the reports of the external auditor. The committee also met with the auditor in the absence of the Executive Board of Directors. The committee also advised the Supervisory Board on the performance of the external auditor. The committee considered the performance of the auditor to be adequate.
After 15 August 2019, the committee met twice in its new composition. The committee had an initial consultation with the external auditor. In that context, the committee had a number of discussions with the members of the Executive Board of Directors, managers and other Bouwinvest staff members. The committee had detailed discussions regarding risk management and the monitoring and control framework.
Selection and Remuneration committee
Prior to the resignation of Kees Beuving, the Selection and Remuneration committee consisted of the members Carolien Gehrels (chair) and Kees Beuving. The committee did not meet in that composition.
As of 11 November 2019, the Selection and Remuneration committee consists of Gabriëlle Reijnen (chair) and Jos Nijhuis. The committee did not meet in 2019. In view of the extraordinary situation, the members of the Supervisory Board did discuss the performance of the Executive Board of Directors and the setting of targets.
Now that the committee has a full complement of members, it discussed the results of the recent employee satisfaction survey and the new job evaluation system and is currently working on the remuneration for 2019 and the target-setting for 2020.
The composition of the Supervisory Board and of the board’s committees is shown in the figure below.
J.A. Nijhuis (Chair)
J.H.P.M. van Lange
Audit, Risk & Compliance committee
Selection and Remuneration committee
All the members of the Supervisory Board are independent according to the criteria as these are laid down in the regulations of the Supervisory Board. The Supervisory Board consists of two male members and two female members. The Executive Board of Directors consists of three male members and one female member. The Supervisory Board and the Executive Board of Directors will do their utmost to also achieve a distribution of the seats on the Executive Board of Directors that is as diverse as possible.
The Supervisory Board met twice in the period to 17 April 2019. The board also met via teleconference on one occasion. The board met a total of six times in its new composition, including a meeting in connection with the induction programme. The members also met a number of times via teleconference in connection with the approval of both Dutch and international investments.
The Supervisory Board, consisting of the members Kees Beuving (chair), Carolien Gehrels, Jan van der Vlist and Roel Wijmenga resigned on 18 April 2019, due to differences of opinion with the shareholder regarding Bouwinvest’s strategy and the structuring of the organisation, once it was revealed that these differences were irreconcilable. Kees Beuving resigned earlier, on 1 February 2019. Following the resignation of the Supervisory Board, a full new board was appointed. As of 13 May 2019, Jos Nijhuis was appointed as supervisory director and chair of the board. As of 24 May 2019, Jos van Lange was appointed as supervisory director and chair of the Audit, Risk and Compliance committee. Wendy Verschoor was appointed as supervisory director as of 15 August 2019 and Gabriëlle Reijnen was appointed as supervisory director as of 11 November 2019. This means the Supervisory Board is now at full strength. Wendy Verschoor was appointed in the context of the Work’s Council’s enhanced right of recommendation. The Supervisory Board would like to thank Kees Beuving, Carolien Gehrels, Jan van der Vlist and Roel Wijmenga for their work as supervisory directors.
As of 15 October 2019, Rianne Vedder was appointed Chief Financial & Risk Officer (CFRO), as the successor to Arno van Geet. The search for the CFRO was led by the Supervisory Board. Rianne Vedder was appointed due to her background and experience in fields including finance, risk management, operations and IT. Rianne Vedder gained this expertise and experience with both financial institutions (banks, insurers, pension funds /pension fund providers, asset managers), as well as non-financial institutions. The Works Council issued a positive opinion with respect to the appointment.
In view of the phased appointment of all the supervisory directors in 2019, the Supervisory Board has not yet conducted an internal analysis of its performance. The board has decided to have an external evaluation of its performance conducted this year , to give it an opportunity to optimise the composition and the various roles.
Word of thanks
The Supervisory Board would like to thank the members of the Executive Board of Directors and all Bouwinvest employees for their commitment and engagement and for the good results the company recorded last year.
Amsterdam, 9 april 2020
The Supervisory Board
Jos van Lange