Gerard J. Kleisterlee (1946, Dutch)
Member of the SB since 2015; first term expires in 2019
Chairman of the SB, Chairman of the Selection and Nomination Committee and member of the Technology Committee
l Mr. Kleisterlee was the President and CEO of the Board of Management of Royal Philips N.V. from 2001 until 2011, after having worked at Philips from 1974 onwards.
l Currently, Mr. Kleisterlee is the Chairman of the Board of Vodafone Group Plc. and Non-Executive Director of Royal Dutch Shell Plc.
Antoinette (Annet) P. Aris (1958, Dutch)
Member of the SB since 2015; first term expires in 2019
Member of Technology Committee and Remuneration Committee
l Ms. Aris is Adjunct Professor of Strategy at INSEAD, France, a position she has held since 2003.
l From 1994 to 2003 Ms. Aris was a partner at McKinsey & Company in Germany.
l Currently, Ms. Aris is a Non-Executive Director of Thomas Cook Plc. and a member of the supervisory boards of ProSiebenSat.1 AG, Jungheinrich AG and ASR Nederland N.V.
Clara (Carla) M.S. Smits-Nusteling (1966, Dutch)
Member of the SB since 2013; second term expires in 2021 Chairperson of the Audit Committee
l Ms. Smits-Nusteling was CFO and a member of the Board of Management of Royal KPN N.V. from 2009 until 2012.
l Prior to that, Ms. Smits-Nusteling held several finance and business related positions at Royal KPN N.V. and PostNL.
l Currently, Ms. Smits-Nusteling is a Non-Executive Director of the Board of Tele2 AB, a member of the Management Board of the Foundation Unilever N.V. Trust Office, Non-Executive Director of the Board of Directors of Nokia Corporation and lay judge of the Enterprise Court of the Amsterdam Court of Appeal.
Douglas A. Grose (1950, American)
Member of the SB since 2013, second term expires 2021
Vice Chairman of the SB, Chairman of the Technology Committee and member of the Selection and Nomination Committee
l Mr. Grose was CEO of GlobalFoundries from 2009 until 2011.
l Prior to that, Mr. Grose served as senior vice president of technology development, manufacturing and supply chain for Advanced Micro Devices, Inc. Mr. Grose also spent 25 years at IBM as General Manager of technology development and manufacturing for the systems and technology group.
l Currently, Mr. Grose is a member of the Board of Directors of SBA Materials, Inc.
Pauline F.M. van der Meer Mohr (1960, Dutch)
Member of the SB since 2009; third term expires in 2018
Member of the Audit Committee and Selection and Nomination Committee
l Ms. Van der Meer Mohr was President of the Executive Board of the Erasmus University Rotterdam, the Netherlands from 2010 up until and including 2015.
l Prior to that, Ms. Van der Meer Mohr was managing partner of the Amstelbridge Group, Senior Executive Vice President at ABN AMRO Bank, Head of Group Human Resources at TNT N.V., and has held several senior executive roles at the Royal/
Dutch Shell group of companies in various areas.
l Currently, Ms. Van der Meer Mohr is the Chairperson of the supervisory board of EY Netherlands LLP, a member of the supervisory board of Royal DSM N.V., Non-Executive Director of HSBC Holdings Plc, and Chairperson of the supervisory board of Nederlands Danstheater.
Rolf-Dieter Schwalb (1952, German)
Member of the SB since 2015; first term expires in 2019
Chairman of the Remuneration Committee and member of the Audit Committee
l Mr. Schwalb was CFO and member of the Board of Management of Royal DSM N.V. from 2006 to 2014.
l Prior to that, Mr. Schwalb was CFO and member of the Executive Board of Beiersdorf AG and he held a variety of management positions in Finance, IT and Internal Audit at Beiersdorf AG and Procter & Gamble Co.
Wolfgang H. Ziebart (1950, German)
Member of the SB since 2009; third term expires in 2019
Member of the Technology Committee and the Remuneration Committee
l Mr. Ziebart was President and CEO of Infineon Technologies A.G. from 2004 until 2008.
l Prior to that, Mr. Ziebart was on the Boards of Management of car components manufacturer Continental A.G. and automobile producer BMW A.G.
l Currently, Mr. Ziebart is the Chairman of the supervisory board of Nordex SE and a member of the Board of Autoliv, Inc.
Company Secretary : Mr. Robert F. Roelofs
Appointed : 2002
Deputy Company Secretary : Ms. Angela J.F.M. van de Kerkhof
Appointed : 2017
Johannes (Hans) M.C. Stork (1954, American)
Member of the SB since 2014; first term expires in 2018
Member of the Technology Committee and the Remuneration Committee
l Mr. Stork is Senior Vice President and CTO of ON Semiconductor Corporation, a position he has held since 2011.
l Prior to that, Mr. Stork held various management positions at IBM Corporation, Hewlett Packard Company, Texas Instruments, Inc. and Applied Materials, Inc., including Senior Vice President and CTO of Texas Instruments, Inc. and Group Vice President and CTO of Applied Materials, Inc. Further, Mr. Stork was a member of the Board of Sematech.
l Currently, Mr. Stork is a member of the Scientific Advisory Board of imec.
Introduction
As ASML’s Supervisory Board we aspire to live up to the highest standards of corporate governance. We focus on the long term and on sustainable value creation, always acting in the best interests of the company and all its stakeholders. We do so by ensuring that our company pursues a strategy that secures our position in the industry, with the right people and policies in place for successful implementation of the company’s strategy. We uphold an appropriate system of checks and balances, provide oversight, evaluate performance and give advice where required. ASML is fully compliant with the revised Dutch Corporate Governance Code, which came into effect on January 1, 2017. In this Supervisory Board Report, we report on our activities in 2017 and provide the information required by the Dutch Corporate Governance Code.
Characterized by significant growth, 2017 was a very good year for ASML. It was the breakthrough year for our EUV technology.
We shipped a total of 10 EUV systems to all of our major customers, showing that the industry has turned the corner towards using EUV in high-volume microchip production. We also made strides in the integration of HMI, launching the first product jointly developed with the engineering team of this pattern verification specialist which we acquired in 2016. With the strong support of our customers we approved an ambitious product development program for EUV High NA that will further enable the continuation of Moore’s Law well into the next decade. In this context we took our cooperation with Carl Zeiss AG a step further, acquiring a 24.9 percent indirect interest in our strategic supplier Carl Zeiss SMT GmbH. All of this puts us well on track towards achieving our stated 2020 ambitions.
Strong growth in a demanding high technology industry, however, is also very demanding on our people and organization and therefore we spent a significant part of our meetings with management discussing organizational development and future leadership requirements. We started a project for leadership assessment and development for our top 100 to ensure we have the bench strength required for the continuation of our successful journey. While we still have many technological and organizational hurdles to overcome, we are confident that ASML is very well positioned for the future.
Activities in 2017
In 2017, the SB discussed at length ASML’s corporate strategy, including its implementation and translation thereof into Corporate Priorities. EUV, DUV, Holistic Lithography and High-NA, were extensively reviewed and discussed throughout the year. With respect to EUV, the SB provided the BoM with support and advice relating to the further development of this technology as well as its industrialization. In DUV, the SB supported the BoM in its activities to further increase competitiveness and operational excellence.
The growing pattern fidelity control business, including Holistic Lithography, was another topic to which the SB devoted a
substantial amount of attention. This included monitoring the integration of HMI. The SB also reviewed the High-NA program from a technological and a commercial perspective, as well as the cooperation with Carl Zeiss SMT GmbH in this area.
A recurring item on the SB agenda is a review of the developments in the semiconductor market and in the customer domain, financial performance and the development of ASML’s share price and analyst perceptions.
Other topics addressed by the SB were the annual budget and the quarterly results and accompanying press releases, as well as the outcomes of the year-end US GAAP and IFRS-EU audits. The SB reviewed the financing of ASML, including the long term financial plan and ASML’s capital return policy and approved the BoM’s dividend proposal as submitted to the AGM in 2017. The SB also provided advice to the BoM in relation to the share buyback program, which was resumed in the third quarter of 2017 after having been paused since July 20, 2016. The SB also reviewed ASML’s annual and interim financial statements, including non-financial information, prior to publication thereof.
A substantial amount of attention was paid to a review of ASML’s risk landscape and the risk appetite as well as the risk mitigation measures taken. Part of a significant review on our risk management approach were the assessment and mitigation of supply chain related risks, as well as ASML’s quality program.
Furthermore, the SB looked into ASML’s organizational structure, which was extensively reviewed in light of the rapid growth of the company. People development was also a recurring agenda item in the SB meetings. In 2017, a detailed review was performed with regard to talent management and succession planning for the BoM and senior management.
Corporate responsibility strategy was another topic discussed by the SB. This included actions implemented or to be implemented to achieve sustainability targets set with respect thereto. Corporate responsibility was also addressed in the SB’s Remuneration Committee as it is a long-term qualitative target for the BoM.
Corporate governance developments were also discussed by the SB in 2017. This included a discussion on ASML’s implementation of the new Dutch Corporate Governance Code.
The SB also closely followed the developments in the legal proceedings between ASML and Nikon.
In 2017, a delegation of the SB met with the Works Council twice in formal meetings. The topics of these meetings generally focused on the strategy and the overall performance of ASML, particularly in EUV, the composition of the SB and the BoM, the Remuneration Policy for the BoM, the alignment of remuneration policies for senior management and the job grades below that level, company culture, and our strategy and business-development process. Other topics included our values and culture, and long-term value creation. Finally, the SB and the Works Council reflected on their cooperation over the past years, as the Works Council’s term of office ended in October 2017.
An SB delegation and the Works Council also discussed the process of finding a successor for Ms. Van der Meer Mohr, who will step down per the 2018 AGM and for whose position the Works Council has an enhanced right of recommendation.