Supervisory Board Charter. Ernst & Young Nederland LLP

Transcription

1 Supervisory Board Charter Ernst & Young Nederland LLP Preamble Per 1 July 2015, Ernst & Young Nederland LLP ("EY" or "the Partnership") set up a supervisory board ("the SB"). The first supervisory directors were appointed by Ernst & Young Europe LLP ("Ernst & Young Europe") on the nomination of EY's Board of Directors ("the Board of Directors"). On 27 June 2016, after Ernst & Young Europe's approval, the SB adopted this Charter, which, together with the Partnership's Regulations and Fundamental Rules, constitutes the basis for the SB's governance, rights and powers. I Principles of Dutch Corporate Governance Code; requisite departures therefrom The wish to set up an SB ensues from the social and political debates on the social duties and the structure of audit firms, to which auditors, as a professional group, have also contributed. As regards the SB's composition and procedures, principles III.1, III.2 and III.3 of the Dutch Corporate Governance Code (version of 2008, hereinafter "the DCGC") have served as a basis, with the following fundamental differences between EY and the DCGC's envisaged target group having been considered. The DCGC is geared to Dutch legal entities, whereas EY is an LLP organized and existing under the laws of England and Wales. The DCGC is geared to companies with share capital, whereas EY is a partnership, with no principal distinction between capital and management. The DCGC is geared to listed companies, whereas EY is not a listed company and does not, as such, rely on the capital market. Listed companies commonly have spread shareholding structures, featuring a few larger shareholders, whereas EY has a multitude of capital-contributing members whose managing directors work as professionals in the various professional practices affiliated with EY, as well as having one member exercising - going concern - control over EY, i.e. Ernst & Young Europe. The partners are also members of Ernst & Young Europe and of the LLP in which the relevant professional practice is carried out. EY is an independent member firm within the Ernst & Young global network. All of the professionals working for EY s affiliated professional practices are bound by distinct laws, professional rules and regulations, including, for example, the rules of the Netherlands Institute of Chartered Accountants [Nederlandse Beroepsorganisatie van Accountants, "NBA"], the Dutch Association of Tax Advisers [Nederlandse Orde van Belastingadviseurs, "NOB"], the Register of Tax Advisers [Register Belastingadviseurs, "RB"] and the Dutch Association of Registered EDP Auditors [Nederlandse Orde van Register EDP-Auditors, "NOREA"].

2 Page 2 These differences result in departures from the DCGC's principles referred to above. II Scope of SB The following factors. The wish to set up an SB at the holding level (EY, in this case) geared to the interests of the legal entity and the entire business associated with it The wish to let the SB focus specifically on organization-wide aspects that affect the quality of the audits performed by auditors of Ernst & Young Accountants LLP (hereinafter "EYA"), i.e. aspects of independence, integrity and the interests of external stakeholders during the audit, and The respect for and recognition of the autonomy of the professionals in the professional practices affiliated with EY who are not responsible for statutory audits and who are subject to their own rules and regulations on the grounds of Dutch law and/or as drawn up by professional organizations, result in the SB's following general duties and powers. 1. To supervise the policies pursued by EY's Board of Directors and the general affairs of EY and its affiliated professional practices in the Netherlands 2. To supervise the policies pursued by EYA's Board and the general affairs of EYA and the audit practice affiliated with it 3. The supervision of the Board of Directors of EY with regard to the policies and the general affairs of professional practices other than EYA is one of the SB's duties only to the extent that such policies and general affairs affect audit quality, the way in which the audit firm safeguards the public interest and compliance with independence rules and other codes of conduct (including, in particular, on integrity) within EY. The SB s tasks and duties are further elaborated on in Article 3 of this Charter. In case of incongruity, the preamble takes precedence over Article 3. This preamble forms an integral part of this Charter. 1 Introduction; general provisions 1.1 Terms (either capitalized or not capitalized) used in this Charter will have the meaning given to them in this Charter and the Glossary appended hereto as Annex A. 1.2 In the event that a provision laid down in this Charter is not or no longer valid, this will not affect the validity of the other provisions. The SB shall replace the invalid provision by a valid one whose effect - given its contents and purpose - will equal the invalid provision's effect to the extent possible. 1.3 This Charter and the annexes hereto may be amended by the SB, provided that the decision to that end is approved in advance by Ernst & Young Europe. Amendments are recorded in the Report of the SB as referred to in Article 3.5 of this Charter.

3 Page The following annexes, which form an integral part of this Charter, have been appended hereto. Annex A: Annex B: Annex C: Annex D: Glossary Profile of the SB's size and composition Independence requirements for members of the SB Rotation schedule for the SB's members 1.5 This Charter has been posted on and can be downloaded from the Partnership's website: 2 Composition of SB 2.1 The SB consists of three or five members, the number to be determined by Ernst & Young Europe. The members are natural persons, appointed by Ernst & Young Europe on the SB's binding nominations. The SB shall make such nomination at the request of Ernst & Young Europe. Ernst & Young Europe may, however, disregard (any part of) such binding nomination, after the SB has been provided with the opportunity to voice its opinion on the decision in question. Ernst & Young Europe, the Board of Directors and the works council of EY may put forward candidates for nomination by the SB. To that end, the SB will provide them in a timely fashion with information on when and why a vacancy has arisen and what profile must be met. 2.2 Supervisory directors may be suspended and removed from office by Ernst & Young Europe after the SB has been provided with the opportunity to voice its opinion on the decision in question. Supervisory directors may also resign of their own accord. 2.3 The SB shall prepare a profile of its size and composition, taking into account the nature of EY s business, its activities and the desirable expertise, experience and independence of its members. The SB shall evaluate the profile annually. The SB's current profile is provided in Annex B hereto. Adoption or amendment of the profile is subject to approval by Ernst & Young Europe. 2.4 The SB's composition will be such that the combination of experience, expertise and independence of its members will meet the profile as provided in Annex B and will enable the SB to act in accordance with its various obligations as set forth herein, and in accordance with applicable laws, rules and regulations. 2.5 The SB's members will divide their duties among them, with due observance of the profile provided in Annex B. The President of the SB shall inform the Board of Directors of the allocation of duties among the SB members.

4 Page In composing the SB, the following requirements must be observed. a) Within the scope of the SB's duties and powers, each of its members is able to assess the outlines of all of the policies pursued by the Partnership and its professional practices. b) Each of its members suits the profile provided in Annex B; the SB as a whole is composed in accordance with Article 2.4 through that member's participation in the SB (upon appointment (or reappointment) and thereafter). c) At least one of its members has gained relevant knowledge and experience in the financial administration/accounting area with a large organization of professionals or with a large legal entity. d) At least one of its members is an expert in the fields of or has a feeling for, quality policies in audit firms and the public interest. e) Each of its members, with the exception of no more than one person, is independent as referred to in Article 2.7. f) None of its members may be appointed after the second 4-year term or after his/her 8th year in office. The term served by a supervisory director on the Public Interest Committee of EYA will also be counted for this purpose. g) None of its members may have more than five supervisory directorships with Dutch listed companies, with presidencies counting double. h) The President of the SB is independent as referred to in Article 2.7. i) Each of its members meets the suitability and/or reliability requirements of the AFM. j) One supervisory director has a background of service in the Ernst & Young global network. In the Report of the SB, the SB will state which supervisory director it considers nonindependent. 2.7 A member of the SB will not be considered independent (and, hence, qualify as independent in the event that none of the provisions below apply to him/her) in the event that he/she, or his/her spouse or spousal equivalent, or foster child or relative by consanguinity or affinity within the second degree: a) was an employee, partner or member of the Board of Directors of the Partnership (including controlled businesses) during the five years preceding his/her appointment as a supervisory director b) receives personal financial compensation from the Partnership, other than the remuneration received for the activities carried out in his/her capacity as a supervisory director or in the course of the Partnership's ordinary business operations c) maintained an important business relationship with the Partnership or with a business controlled by it during the year preceding his/her appointment as a supervisory director, including, at any rate, the situation where he/she, or a firm of which he/she is an - indirect - shareholder, partner, staff member or adviser, acted as an adviser to the Partnership (e.g. as a consultant, external auditor, civil-law notary or lawyer) and the case where the SB member is a management board member or an employee of any bank with which the Partnership has a longstanding and significant relationship. This does not include the situation where he/she acted as a member of EYA's Public Interest Committee or the situation

5 Page 5 where an EY member firm in conformity with market conditions has provided services to a member of the SB, his/her spouse or spousal equivalent, or foster child or relative by consanguinity or affinity within the second degree d) is a managing director of a company in which a member of the Board of Directors of the Partnership (which he/she supervises) is a supervisory director (interlocking directorships) e) is or was, during the five years preceding his/her appointment, an executive officer with or otherwise holds a management post with a legal or other entity working together with the Partnership internationally, and/or f) during the preceding 12 months, temporarily provided for EY's management in the absence and/or inability to act of members of the Board of Directors. 2.8 Each SB member must provide the President of the SB with the information required to establish and, if applicable, update his/her: a) gender; b) age; c) profession; d) principal position; e) nationality; f) other posts held, to the extent relevant to fulfilling the duties of a supervisory director; g) the date of his/her first appointment; and h) the current term for which he/she has been appointed. The President shall see to it that such information is disclosed in the Report of the SB. 2.9 In composing the SB, a balanced distribution of the seats among women and men, i.e. at least 30% women and at least 30% men, is pursued EY shall promptly post any changes to the SB's composition on its website, stating the reason (or reasons) for accession or resignation EY and its controlled businesses are bound by national and international independence requirements. The requirements for members of the SB have been set out in detail in Annex C. Annex C and any amendments thereto are adopted by the SB, after a proposal of the Board of Directors and subject to approval of Ernst & Young Europe. In the event that, due to changed circumstances, the independence of a member of the SB is at issue, the matter is to be promptly discussed and resolved in tandem with the Chairman of the Board of Directors and EY's Independence Leader. 3 Duties and powers of SB 3.1 It is the SB's duty to supervise the policies pursued by the Partnership's Board of Directors and the general affairs of the Partnership and its affiliated professional practices in the Netherlands. The SB provides advice to the Board of Directors. The supervision of the Board of Directors with regard to the policies and the general affairs of professional practices other than EYA is one of the SB's duties only to the extent that such policies and general affairs affect audit quality, the way in which the audit firm

6 Page 6 safeguards the public interest and compliance with independence rules and other codes of conduct (including, in particular, on integrity) within the Partnership. In fulfilling its duties, the SB will focus on the interests of the Partnership and its affiliated professional practices, with the SB weighing the safeguarding of the public interest at EYA and eligible interests of all parties involved in the Partnership (including its affiliated professional practices, its members, partners, professionals and employees). The SB is responsible for the quality of its performance itself. 3.2 The SB's duties and powers include: a) Supervising and rendering advice to EY's Board of Directors regarding: (i) the achievement of the goals of the Partnership and the professional practices affiliated with it; (ii) the strategy and risks associated with the Partnership's business; (iii) the Partnership's financial reporting process; (iv) the design and operation of the Partnership's internal risk management and control systems; (v) compliance by the Partnership with laws, rules and regulations; and (vi) issues of socially responsible professional practice relevant to the Partnership b) Supervising and rendering advice to EYA's Board regarding: (i) the way in which EYA safeguards the public interest; (ii) EYA's quality control system; and (iii) the procedure for dealing with notifications/reports and complaints c) Deliberations with relevant supervisory bodies, including, in any case once a year, consultations with the Netherlands Authority for the Financial Markets [Autoriteit Financiële Markten, "AFM"], without the Board of Directors being present d) Disclosure of and overseeing compliance with the Partnership s chosen corporate governance structure as set out in this Charter e) Approving the financial statements of the Partnership f) Making binding nominations for the appointment of members of the Board of Directors of EY. Ernst & Young Europe and/or Ernst & Young Global may make recommendations to the SB of persons qualified for appointment to the Board of Directors of EY. The SB shall make such nominations at the request of Ernst & Young Europe. Ernst & Young Europe may, however, disregard (any part of) such binding nomination, after the SB has been provided with the opportunity to voice its opinion on the decision in question. Ernst & Young Europe will not render any decision to remove members of EY's Board of Directors from office until it has consulted the SB g) Suspending members of EY's Board of Directors. Ernst & Young Europe may lift a suspension or decide to remove the suspended member from office h) Approving the appointment of or termination of partners who work in EYA's audit practice, taking into consideration the rules and regulations for appointment i) Approving and safeguarding EYA's quality policies, and promoting and assessing audit quality j) Approving the appointment of EYA's Compliance Officer and its substitute, advising on the removal from office from EYA s Compliance Officer and its substitute, and involvement in the evaluation of EYA s Compliance Officer k) Reviewing the (annual) reports of EYA's Compliance Officer l) Approving the remuneration policies for members of the Board of Directors and partners and staff members of EYA

7 Page 7 m) Setting the remuneration (with due observance of the aforementioned remuneration policies) and the contractual terms and conditions of the members of EY's Board of Directors in their capacities as such n) Formulating basic principles for the time to be spent by members of EY's Board of Directors and EYA s policymakers on administrative duties and management tasks, and client work, respectively o) Evaluating and assessing the performance of EY's Board of Directors and the SB, and of their individual members (including a review of the profile for the SB, and the induction and training programs; see Articles 2.3 and 10) and discussing the findings with Ernst & Young Europe p) Handling and rendering decisions regarding reported alleged irregularities relating to the performance of members of the Board of Directors, as referred to in Article 11.2 q) Rendering decisions on the enforcement of a clawback on EYA s partners of which the professional is a member of the EY Board of Directors in accordance with the clawback scheme applicable to EY and EYA r) Approving draft decisions on the enforcement of a clawback on EYA s partners in accordance with the clawback scheme applicable to EY and EYA s) Approving an action plan if a periodic assessment of the mindset and drivers of partners, other managers and staff working in the audit practice of EYA indicates the need for such an action plan, and t) Approving regulations governing private investments for partners of EY and its controlled businesses where those regulations extend beyond the independence rules. 3.3 Furthermore, the following decisions of the Board of Directors are subject to approval by the SB. a) A decision to issue debentures in order to acquire borrowed funds for the Partnership or for any limited or general partnership in which the Partnership is a fully liable partner and to apply for a listing of these debentures on a regulated market or multilateral trading facility as defined in Section 1.1 of the Dutch Financial Supervision Act, or any system similar to such regulated market or multilateral trading facility in a country that is not a Member State, or to apply for the revocation of any such listing b) Any decision on the conclusion or termination of permanent forms of collaboration by the Partnership or EYA with another entity, company or partnership, whether on its own or as a fully liable partner in a limited or general partnership, provided that the collaboration or its termination has a significant impact on the Partnership c) To acquire any participating interest having a value of 15 million euros or more in the capital of another company, whether by the Partnership itself or by any of its controlled businesses, or any decision to significantly increase or reduce any such participating interest d) Investments involving an amount of 15 million euros or more e) A decision to amend the Regulations of the Partnership f) A decision to apply for a winding-up order or suspension of payments for the Partnership

8 Page 8 g) Any decision to terminate the employment contracts of a considerable number of employees in the Partnership or EYA concurrently or within a short time span h) To make significant amendments to the terms of employment of a considerable number of employees in the Partnership or EYA. 3.4 A decision of Ernst & Young Europe to amend the Fundamental Rules of the Partnership is also subject to approval by the SB. 3.5 Annually, after the end of the Partnership's financial year, the SB shall draw up, discuss with the Board of Directors and publish a report on the performance of and activities carried out by the SB during that financial year. In any case (to the extent applicable), the report must contain the following information. a) A report on the SB's activities in the past financial year b) A description of any amendments made to this Charter and/or the annexes hereto, pursuant to Article 1.3 of this Charter c) An account of the departures from the profile as laid down in Annex B and from Article 2.6 of this Charter as to the composition of the SB d) A statement as to which SB members, in the SB's opinion, do and do not qualify as independent within the meaning of Article 2.7 of this Charter e) A list, for each SB member, of the characteristics mentioned in Article 2.8 of this Charter f) A statement as to which SB members have been frequently absent during meetings, in conformity with Article 7.2 of this Charter g) A statement as to the discussions described in Article 8.5 of this Charter being held h) Publication of all decisions rendered by the SB in which conflicts of interest have occurred, stating the specific interest in conflict and the declaration that Articles 9.1, 9.3 and 9.4 of this Charter were complied with i) The outcome of compliance with the internal quality indicators as reported by EYA's Board to the SB, pursuant to Article 12.4 of this Charter. 4 President, Vice-President and Secretary 4.1 Ernst & Young Europe shall appoint the President of the SB to his/her post, with due observance of the provision laid down in Article 2.6, paragraph h.). 4.2 The SB shall appoint a Vice-President from its members. The President shall determine the agendas for the SB's meetings, preside over those meetings, see to the proper performance of the SB, ensure the adequate provision of information to the supervisory directors, ensure that there be enough time for the decision-making process, see to the induction and training programs for supervisory directors, act as the SB's principal point of contact in respect of the Board of Directors and initiate the evaluation of the performance of the SB and EY's Board of Directors. The President shall consult with the Regional Partner Forum or the Forum's President on any issues they may deem relevant. 4.3 The President of the SB shall see to the following. a) The SB's members attend their induction and training programs.

9 Page 9 b) Information is provided to the SB's members in a timely and adequate fashion, as required for the proper fulfilment of their duties, including: (i) the (annual) reports prepared by EYA's Compliance Officer; (ii) HR-related information, to the extent relevant; (iii) reports, whether or not through the EY Ethics Hotline, to the extent relevant; (iv) important complaints and claims and their handling; (v) the relevant correspondence between EY/EYA and its supervisory bodies (notifications, incident reports and other reports); (vi) reports prepared by and decisions rendered by the NBA within the framework of quality supervision; and (vii) the results of employee satisfaction surveys. c) There is ample time for obtaining advice, deliberations and decision-making by the SB. d) The performance of the members of EY's Board of Directors and the SB is annually evaluated and assessed. e) A Vice-President is appointed for the SB. f) The contacts with EY's Board of Directors are adequate and the other SB members are informed on time and with due care regarding their outcome. g) Reports of potential conflicts of interest as referred to in Article 9 are received and decisions are rendered on them. h) Reported alleged irregularities relating to the performance of members of EY's Board of Directors, as referred to in Article 11.2, are received and decisions are rendered on them. i) Yearly consultations between a delegation from the SB and a delegation from the works council are held. 4.4 The SB will be supported by a Secretary. The Secretary shall be appointed and may be removed from office by EY's Board of Directors, whether or not on the SB's initiative, upon the SB's approval having been obtained. In particular, the Secretary (hereinafter "the SB's Secretary") is responsible for: a) following the proper procedures and acting in accordance with the statutory obligations and the obligations laid down in the Articles (including the obligations on the grounds of this Charter) b) supporting the President of the SB in the SB's actual organization (information, placing items on the agenda, evaluation, etc.), and c) the induction and training programs. 5 Appointment (or reappointment); term and resignation 5.1 Nominations for the appointment (or reappointment) of SB members must be substantiated. In the event of reappointment, the way in which the candidate fulfilled his/her duty as a supervisory director will be taken into account. Supervisory directors may have a seat on the SB for a period not exceeding four years and will then be eligible for reappointment, on the understanding that a member's term may not at any time exceed two 4-year terms or, if applicable, eight years in total. For purposes of this clause, the term served by a supervisory director on the Public Interest Committee of EYA will also be counted.

10 Page The SB shall draw up a rotation schedule to prevent, to the extent possible, reappointments from taking place simultaneously. The current rotation schedule is provided in Annex D hereto. Without prejudice to Article 5.3, SB members shall resign in conformity with the rotation schedule. 5.3 SB members may be required to resign prematurely in the event of their inadequate performance or a permanent incompatibility of interests, or if otherwise so dictated, in each case, in the opinion of the other members of the SB. 6 Remuneration 6.1 The remuneration of the President of the SB and that of the other SB members is decided by Ernst & Young Europe. In consultation with the Board of Directors, the SB may, from time to time, submit a proposal in relation thereto. The remuneration of the SB's members will not depend on EY's results. In the event that the supervisory directors are required to charge any VAT on their remuneration, EY shall pay such VAT. 6.2 None of the SB's members may accept any personal loans or guarantees from EY. Any loans (which might have been outstanding when being appointed supervisory director) may not be remitted. 6.3 Travel expenses incurred by SB members in connection with attending meetings will be reimbursed by EY. Accommodation expenses and other costs will, in whole or in part, be eligible for reimbursement only in the event that they were made with the President's prior permission. The President of the SB shall annually inform the SB of any such costs made. 6.4 The remuneration, expense reimbursements (if any) and other agreed-upon conditions, including the date on which the relevant amounts will be paid, will be determined by Ernst & Young Europe and must be laid down in writing in an agreement between the Partnership and the relevant supervisory director. The notes to the financial statements will provide the full details of the amounts and of the structure of the remuneration and/or reimbursements paid to SB members. 6.5 As far as possible, the Partnership shall take out liability insurance for the SB's members to cover (to the extent possible) the costs of any liability under civil law, penal law or administrative law, including the costs of legal assistance. 7 SB meetings (agendas, conference calls, attendance, minutes) 7.1 The SB shall meet at least four times a year and, furthermore, as frequently as the majority of its members consider necessary. The meetings will, as a rule, be held at the Partnership's office, but may also be held elsewhere. Meetings may also be held by conference call or video conferencing, provided that all participating members can understand each other simultaneously. The President shall determine a meeting schedule in consultation with the SB's members.

11 Page If a member of the SB is frequently absent, the President shall hold him/her to account for such absence, requesting an explanation. The Partnership shall state in its annual report which SB members were frequently absent from meetings. 7.3 Unless the SB decides otherwise, the SB's meetings will be attended by EY's Board of Directors, with the exception of the - parts of - meetings addressing: a) the evaluation of the performance of the members of EY's Board of Directors and its individual members, and the conclusions to be drawn from that evaluation b) the evaluation of the performance of the SB and its individual members, and the conclusions to be drawn from that evaluation, and/or c) the SB's desirable profile, composition and competence. EY's Chairman shall actively inform the SB of the decision-making process going on in Ernst & Young Europe or Ernst & Young Global regarding the strategy and how it is converted by EY's Board of Directors into EY policies, taking into account local laws, rules, regulations and the public interest at EYA. 7.4 The Partnership's external auditor shall attend that part of the SB's meeting in which the audit and presentation of the financial statements is addressed. 7.5 Meetings will be convened by the SB's Secretary on behalf of the President. To the extent practically feasible, the agenda of items to be discussed and any discussion papers for the meeting will be provided to the SB's members and the Chairman of the Board of Directors seven days before commencement of the meeting. 7.6 The SB's Secretary will draft minutes of the meetings. As a rule, such minutes will be confirmed during the next meeting. In the event, however, that all SB members agree to the contents of the minutes, they can also be confirmed earlier. As a sign of their confirmation, the minutes will be signed by the President of the SB and sent to the other SB members as soon as possible. Excerpts of the confirmed minutes may be signed and provided by the SB's Secretary. 8 Decisions rendered by SB (quorum, votes, subjects for discussion) 8.1 The SB may render legally valid decisions during meetings only in the event that the majority of its members is present, represented by proxy or attends through telecom or IT-equipment, on the understanding that members with conflicts of interest as referred to in Article 9 are not included in the calculation of this quorum. Vacancies on the SB do not prevent the SB from rendering legally valid decisions and do not count in the determination of the number of members of the SB. 8.2 The SB may also render decisions outside meetings, provided that the subject in question was brought to the attention of all members, all of the members agreed to this way of decision-making, and all contributed to the decision-making process, on the understanding that members with conflicts of interest as referred to in Article 9 refrain from taking part in the decision-making process. Decisions thus rendered will be laid

12 Page 12 down in writing and signed by the President, with any responses received in writing being appended. If a decision is rendered outside a meeting, it must be reported at the next SB meeting and included in its minutes. 8.3 Without prejudice to Article 9, the SB may render legally valid decisions in or outside meetings with a simple majority of the members present, represented by proxy or attending through telecom or IT equipment or, in case of decisions outside meetings, of all members. In the event of a tie, the President will cast the decisive vote. 8.4 Recurring subjects for meetings are, in any case, the Partnership's financial results, important decisions in respect of which the SB must take action, the Partnership's strategy and any changes thereto (such as the long-term strategy, capital investments not coming under the Partnership's budget, capital structures for the long term, the setting up of new business units, or important acquisitions and disposals) and safeguarding the public interest at EYA. 8.5 The SB shall discuss, at least once a year, without the Board of Directors being present: a) the performance of the SB and that of its individual members, and the conclusions to be drawn from that discussion b) the SB's desirable profile, composition and competence c) the performance of the Board of Directors and that of its individual members, and the conclusions to be drawn from that discussion d) the induction and training programs as referred to in Article 10, and e) the strategy pursued by and risks associated with EY's professional practices and the results of the review by the Board of Directors of the design and operation of EY's internal risk management and control systems, as well as any significant changes thereto. The report of the SB must mention the discussions having been held. 9 Conflicts of interest 9.1 Supervisory directors shall refrain from taking part in any SB discussions and decisionmaking processes regarding subjects or transactions in respect of which they have conflicts of interest with the Partnership as referred to in Article 9.2 (including, for purposes of this Article, any of the Partnership's controlled businesses). If approved, such transactions may exclusively be entered into on conditions that are at least common in the sector, and they will require the SB's approval. The President of the SB shall ensure that all transactions in respect of which conflicts of interest played a role be disclosed in the annual report, stating the conflict of interest in question and declaring that Articles 9.1, 9.2 and 9.3 were complied with. 9.2 A conflict of interest in respect of a supervisory director that is material to the Partnership or the relevant supervisory director ("a conflict of interest") will, in any case, exist in the event that:

13 Page 13 a) the Partnership intends to enter into a transaction with a legal entity in which the supervisory director in question holds a personal financial interest. b) the Partnership intends to enter into a transaction with a legal entity and one of the members of the management board or supervisory board of that entity has a family-law relationship with - the spouse or spousal equivalent, or foster child or relative by consanguinity or affinity within the second degree of - the supervisory director; c) the Partnership intends to enter into a transaction with a legal entity at which the supervisory director holds a management or supervisory post; d) a conflict of interest exists or is deemed to exist under applicable law; and/or e) the President or, if applicable, the Vice-President of the SB has ruled that a conflict of interest exists or is deemed to exist. 9.3 Each SB member (other than the President) shall promptly report every potential conflict of interest to the President of the SB, providing him/her with any and all relevant information about the conflict, including the information regarding his/her spouse or spousal equivalent, or foster child and/or relative by consanguinity or affinity within the second degree. In all cases other than those listed in Article 9.2, paragraphs d. and e., the President of the SB shall determine whether a reported - potential - conflict of interest constitutes a conflict of interest on the grounds of which Article 9.1 applies. In the event that the President of the SB has a potential conflict of interest, he/she shall promptly report this to the Vice-President of the SB in conformity with this clause. 9.4 See Article 2.11 and Annex C for rules on personal financial and general independence applying to members of the SB. 10 Induction program and continuous training 10.1 Following his/her appointment, each SB member will attend an induction program which will address: a) general financial and legal affairs b) the Partnership's financial reporting process c) aspects specific to the Partnership and its activities d) the responsibilities of the SB's members and methods and procedures of the SB; e) safeguarding the public interest, and f) independence The SB shall annually assess in respect of what elements SB members require further training during their term in office. 11 EY Ethics Hotline and other ways to file complaints 11.1 The Ernst & Young global network provides access to an EY Ethics Hotline to report conduct that is potentially unethical, illegal, in breach of the professional rules or otherwise in violation of the Ernst & Young Global Code of Conduct.

14 Page The officer responsible for the EY Ethics Hotline will report any alleged irregularities relating to the performance of members of the Board of Directors to the President of the SB The EY Ethics Hotline is available via the Partnership's website: In case EY should adopt an alternative or additional complaints regulation, this Article will apply accordingly to such regulation. 12 Provision of information; relationship with Board of Directors and EYA's Board 12.1 The SB and its individual members bear their own responsibility in requiring any and all information from the Board of Directors, EYA's Board and the external auditor that the SB needs to be able to properly fulfil its duty as a supervisory body. In the event that the SB deems such necessary, it may obtain information from officers and external advisers of the Partnership. The Board of Directors shall make the requisite resources available for that purpose. The SB may require officers and external advisers of the Partnership to attend its meetings The Board of Directors shall provide the SB with information, on time and - if possible - in writing, regarding the facts and developments in relation to the Partnership that the SB may need to properly fulfil its duty The Board of Directors shall periodically send the SB reports drawn up in a form to be agreed upon from time to time, which provide detailed information about financial matters and audit quality, among other things, with it being possible to set the frequency rate for each subject. A letter from the Board of Directors will be added to its report, in which the Board of Directors shall explain and comment on their reports, as well as providing further information about their policies EYA's Board will annually report to the SB on its findings concerning compliance with the internal quality indicators. The findings will also be included in the Transparency Report EYA's Compliance Officer may report to the SB directly and without the intervention of the Board of Directors or EYA's Board on all matters that he/she deems necessary Without prejudice to the above, the Board of Directors shall annually provide the SB with EY s budget for the upcoming year, a recent version of the long-term plans and the main points of the strategic policies of EY, the intentions as regards EYA's quality policies, EY's general and financial risks, the Partnership's management and control systems, as well as information on compliance with all relevant laws, rules and regulations. The Board of Directors shall also annually make a statement that it has provided the SB with any and all relevant information that is needed to properly fulfil their duties. The said documents will be provided on time, so that the SB can approve them in June of the current financial year, at the latest.

15 Page In the event that a member of the SB becomes privy to information (from a source other than the Board of Directors or the SB) that is useful for the SB to properly fulfil its duties and not protected by a duty of confidentiality, he/she shall make such information available to the President of the SB as soon as possible. The President shall subsequently notify the entire SB In the event of a fundamental difference of opinion between the SB and the Board of Directors, the President of the SB shall contact Ernst & Young Europe's Managing Partner in order to try and reach a solution. 13 Confidentiality; other posts held; non-competition 13.1 Each SB member must observe the requisite discretion and, in relation to confidential information, confidentiality with respect to any and all information and documentation obtained within the framework of his/her SB membership. Current and former SB members shall refrain from sharing confidential information with any party other than the SB or the Board of Directors, from disclosing such information to the public or from otherwise making it available to third parties, unless the Partnership has disclosed the information or it has been established that the information is already in the public domain To the extent that third parties must be notified of the SB's deliberations, they will be so notified by or in consultation with the President of the SB, who shall consult the President of the Board of Directors or EYA's Board about this Each SB member shall report any other posts he/she holds, be it paid or unpaid, as well as any changes thereto, to the President of the SB During their term in office and for 2 years after their resignation, supervisory directors shall refrain from accepting any supervisory directorships or supervisory posts in the Netherlands with, and/or refrain from working as partners, employees or advisers of organizations which, at the date of the end of the term of the relevant SB member, render similar services to those rendered by the Ernst & Young global network. 14 Applicable law and choice of forum 14.1 This Charter is subject to Dutch law Any and all disputes that may arise further to this Charter will be settled in conformity with the Arbitration Rules [Arbitragereglement] of the Netherlands Arbitration Institute [Nederlands Arbitrage Instituut, "NAI"]. The arbitrators will reach their decisions on the basis of the applicable legal rules.