Statement of Principles and Best Practices for the Supervisory Board of SIDN

Article 1 Status and content of the Standing Orders

1.1. These Standing Orders are supplementary to the rules and regulations that apply to the Supervisory Board under Dutch law or the Constitution of the Foundation.

1.2 In any situation where these Standing Orders are inconsistent with Dutch law or the Constitution of the Foundation, the law or the Constitution shall prevail. In any situation where these Standing Orders are consistent with the Constitution of the Foundation, but inconsistent with Dutch law, the law shall prevail. If any provision of these Standing Orders is or becomes invalid, the validity of the other provisions shall be unaffected. The Supervisory Board shall replace any invalid provision with a valid provision whose effect, given its substance and intent, is as close as possible to the invalid provision.

1.3 The following documents are appended to these Standing Orders:

• Standing Orders relating to Membership of and Candidate Profiles for the Supervisory Board

• Retirement and Reappointment Rota for Supervisory Board Members

• Standing Orders of the Audit Committee of the Supervisory Board

• Standing Orders of the Selection, Appointments and Remuneration Committee of the Supervisory Board

• Standing Orders of the Security and Stability Committee of the Supervisory Board

1.4 These Standing Orders were formulated in accordance with Article 27 of the Constitution of the Foundation and best practice provision 2.3.1 of the applicable Dutch Corporate Governance Code ('the Code'), as adopted by the Corporate Governance Code Monitoring Committee on 20 December 2022, setting out (amongst other things) certain best practices for supervisory boards and their committees. Although the Foundation is not governed by the Code, the Foundation supports the principles of good governance set out in the Code and therefore follows the practices defined in the Code wherever it is able to do so.

1.5 The management of the Foundation ('the Executive Board') undertakes to fulfil the obligations and to implement these Standing Orders insofar as they apply to the Executive Board and its individual members (including the provisions of Articles 10.1 and 11 of these Standing Orders).

1.6 These Standing Orders shall be published on, and may be downloaded from, the website of the Foundation.

Article 2 Role of the Supervisory Board, evaluation, fixed agenda items and accountability

2.1 The role of the Supervisory Board shall be to supervise the policies pursued by the Executive Board and the general state of affairs within the Foundation and associated group companies in the sense of Article 2:24b of the Dutch Civil Code (referred to below collectively as 'SIDN'). The Supervisory Board shall also advise the Executive Board. In the performance of its role, the Supervisory Board shall act in the interests of SIDN, while taking account of both the relevant interests of the local internet community, and SIDN's special societal responsibilities.

2.2 The Supervisory Board shall be responsible for its own performance.

At least once a year and without the presence of the Executive Board, the Supervisory Board shall evaluate its own performance, the performance of its committees, and the performance of its individual members, and shall consider the conclusions of that evaluation. In that context, attention shall be paid to:

a) substantive aspects, interaction amongst members, and interaction with the Executive Board;

b) matters that have arisen in practice, from which lessons may be learnt; and

c) the profile, composition, competences and expertise desired of the Supervisory Board.

At least once every three years, the evaluation shall be overseen by an independent external expert. In its annual report, the Supervisory Board shall state how the evaluation was undertaken, and what action is being taken in line with its conclusions.

2.4 In addition, the Supervisory Board shall consider each of the following at least once a year:

a) the performance of the Executive Board and of its individual members, and the conclusions that must accordingly be drawn;

b) the strategy of SIDN and the associated risks;

c) the realisation of SIDN's objectives;

d) the existence, design and performance of internal risk management and audit systems.

e) the Audit Committee's report on the performance of the external auditor, and the Audit Committee's advice regarding the appointment or reappointment of an external auditor and the instructions to be given regarding the audit of the Annual Financial Statement;

f) in consultation with the Executive Board, the appropriate level of liability insurance to be obtained by the Foundation, the Executive Board and the Supervisory Board;

g) the definition and adoption of the sums as referred to in Article 21, clause 1(d), (l), (m) and (o) of the Constitution of the Foundation.

The discussion of those matters shall be covered in the Supervisory Board's report, as referred to in Article 2.4.

2.5 Following the close of each accounting year of the Foundation, the Supervisory Board shall formulate and publish a report on the performance and activities of the Supervisory Board and its committees during the accounting year just ended. The report shall contain at least the information referred to in Articles 2.3, 2.4, 5.3, 9 and 13, and shall be included in the Foundation's Annual Report. The Supervisory Board's annual report shall state:

a) how the evaluation of the Supervisory Board, its individual committees and its individual members was organised;

b) how the evaluation of the Executive Board and its individual members was organised; and

c) what action is being taken in line with the conclusions of those evaluations.

Article 3 Composition, expertise and independence of the Supervisory Board

3.1 The number of members that the Supervisory Board has shall be decided by the Supervisory Board itself. The Supervisory Board shall consist of at least six but no more than nine natural persons. If the membership should at any time fall to fewer than seven persons, the Supervisory Board shall without delay act to increase its membership.

3.2 The Supervisory Board shall formulate candidate profiles for Supervisory Board membership, taking account of the nature of SIDN, the duties of Supervisory Board members, the expertise and experience they should possess, and the diversity they should collectively exhibit. The current candidate profiles shall be included in the Standing Orders relating to Membership of and Candidate Profiles for the Supervisory Board. The Supervisory Board shall consider periodically, at least each time a vacancy arises, whether the current candidate profiles remain appropriate, and shall amend them as necessary. In that context, the Supervisory Board shall take account of external circumstances and SIDN's current strategic course. The Standing Orders relating to Membership of and Candidate Profiles for the Supervisory Board shall be published on the website of the Foundation, as referred to in Article 1.6. The Supervisory Board's annual report shall describe the evaluation of the candidate profiles and any amendments arising out of that evaluation. The Supervisory Board's annual report shall additionally describe the diversity policy, its implementation and its outcome.

3.3 The composition of the Supervisory Board shall be such that the members' collective experience, expertise and diversity are consistent with the Supervisory Board candidate profiles set out in the Annex, and that the Supervisory Board is entirely capable of fulfilling its various obligations towards the Foundation and its stakeholders (including members of the local internet community), in compliance with all applicable legal and regulatory provisions.

3.4 The composition of the Supervisory Board shall take account of the following requirements:

a) Each individual member must be capable of appraising the broad outlines of SIDN's overall policy.

b) Each individual member must conform to the corresponding Supervisory Board candidate profile both at the time of (re)appointment and thereafter, and overall composition of the Supervisory Board must be consistent with Article 3.2.

c) Neither a Supervisory Board member's primary external role nor any secondary external role must compromise his or her ability to properly perform his or her Supervisory Board responsibilities. If a Supervisory Board member's primary external role or any secondary external role changes after joining the Supervisory Board, the member in question must promptly inform the Chair of the Supervisory Board.

3.5 In order to ensure the independence of the Supervisory Board, as required by Article 6 of the Constitution of SIDN, the Supervisory Board's members shall include no more than one non-independent person. A member of the Supervisory Board shall be deemed a non-independent person if the member or the member's spouse, registered partner or other life companion, foster child or first or second-degree blood relative or relative by marriage:

a) is an SIDN employee or a member of SIDN's Executive Board, or has been so in the five years prior to the member's appointment to the Supervisory Board;

b) is a member of SIDN's Complaints and Appeals Board or acts as an arbiter in the context of SIDN's Dispute Resolution System or is otherwise closely associated with SIDN's dispute resolution process;

c) is an executive director, supervisory director, shareholder or employee of a registrar;

d) is in personal receipt of payments from SIDN, other than the payments due to the member in respect of his or her work as a member of the Supervisory Board and payments due in the context of normal business operations;

e) had any significant commercial relationship with SIDN in the year prior to the member's appointment to the Supervisory Board, such as acting as (or being a shareholder or partner in, employee of or consultant to an entity that acts as) a professional service provider (e.g. consultant, external auditor, notary or legal counsel) to SIDN, or acting as a supervisory director, executive director or employee of an organisation with which SIDN has a longstanding and significant relationship (e.g. ICANN, CENTR, RIPE NCC);

f) is an executive director of a legal entity of which a member of the Foundation's Executive Board is also an executive director or a supervisory director;

g) has in the preceding twelve months served as a temporary Executive Board member during the absence of a full Executive Board member;

h) has direct or indirect control over a significant number of .nl domain names.

3.6 Any Supervisory Board member who meets the definition of a non-independent person shall report his or her status to the Chair of the Supervisory Board. If the Chair him/herself meets the definition of a non-independent person, he or she shall report his or her status to the Vice-Chair. Upon learning that one of its members is a non-independent person, the Supervisory Board shall resolve whether the person in question may continue as a Supervisory Board member. The person in question shall be allowed to continue as a Supervisory Board member only if a motion to appropriate effect is passed by a majority of at least three quarters at a meeting attended by at least three quarters of the Supervisory Board members. The person whose continued membership is under consideration shall be excluded from the decision-making process and shall be disregarded when determining whether the meeting is quorate and the size of any majority of votes.

3.7 Upon learning that more than one of its members are non-independent persons, all the members in question except for one must end their Supervisory Board membership. A resolution to terminate the Supervisory Board membership of one or more non-independent persons shall be carried if supported by a simple majority of votes cast, with the person or persons to whom the vote relates shall be excluded from voting.

3.8 The Supervisory Board may designate one or more of its members as 'delegated' members. A delegated member of the Supervisory Board is a member with specific duties. The scope of the delegation shall be limited to the relevant member's own duties and shall not therefore include management of the Foundation, but rather closer supervision and advice, and more frequent consultations with the Executive Board. A delegation shall always be temporary, and shall not diminish the duties or authority of the Supervisory Board. A delegated individual shall remain a member of the Supervisory Board.

Article 4 Chair

4.1 In accordance with Article 10, clause 1, of the Constitution of the Foundation, the Supervisory Board shall select a Chair and Vice-Chair from amongst its own members.

4.2 Notwithstanding the provisions of the Constitution, the Chair of the Supervisory Board shall at least ensure that:

• there is appropriate interaction between the Supervisory Board and the Executive Board, the Staff Council and the organisation;

• the Supervisory Board selects a Vice-Chair;

• there is adequate opportunity for discussion and decision-making by the Supervisory Board;

• Supervisory Board members promptly receive all the information required for the proper performance of their duties;

• the Supervisory Board and its committees function appropriately;

• the performance of individual Executive Officers and Supervisory Board members is appraised at least once a year;

• individual Executive Officers and Supervisory Board members follow their induction programmes;

• the Supervisory Board is alert to signals from SIDN, and that (suspected) material malpractices and irregularities are promptly reported the Supervisory Board;

• general meetings proceed in an orderly and efficient manner;

• the Supervisory Board is promptly and closely involved in any merger or acquisition process.

4.3 In the absence of the Chair, the Vice-Chair shall deputise. In the absence of both the Chair and the Vice-Chair, the other members of the Supervisory Board shall select an Acting Chair.

Article 5 The Supervisory Board and its committees

5.1 The Supervisory Board shall have at least three committees, namely an Audit Committee, a Security and Stability Committee and a Selection, Appointments and Remuneration Committee. The committees shall be established by the Supervisory Board, and their members shall be selected by the Supervisory Board from amongst its own members. The (entire) Supervisory Board shall remain responsible for decision-making, even where preparations are made by one of the Supervisory Board's committees.

5.2 The Supervisory Board shall formulate standing orders for each committee, to supplement these Standing Orders. A committee's standing orders shall define that committee's principles and best practices (duties, composition, meeting arrangements, etc.). The committees' current standing orders is appended to these Standing Orders. If any provision of a committee's standing orders is at odds with these Standing Orders, these Standing Orders shall prevail.

5.3 The composition of the committees, the number of committee meetings held and the main business conducted shall be recorded in the Supervisory Board's annual report. The standing orders of each committee and details of each committee's composition shall be published on the website of the Foundation, as referred to in Article 1.6.

5.4 If one or more of the committees mentioned in Article 1.3 has yet to be established or has been dissolved, the principles and best practices set out in that committee's standing orders shall apply to the Supervisory Board insofar as the latter assumes responsibility for matters that will become or were previously within the remit of the committee in question.

5.5 At least once a year, each committee shall report to the Supervisory Board on the business it has conducted.

Article 6 Appointment, reappointment, terms of office and retirement

6.1 Supervisory Board members shall be appointed in the manner provided for in the Constitution. When a member's reappointment is considered, the manner in which the member has previously performed his or her duties as a Supervisory Board member shall be taken into account. The term of office of each Supervisory Board member shall not exceed three years; at the end of his or her first or second term of office, a member shall be eligible for immediate reappointment for a further term not exceeding three years.

6.2 The Supervisory Board shall draw up a Retirement and Reappointment Rota, which shall be designed to minimise the extent to which multiple members reach the end of their terms of office simultaneously. The current Retirement and Reappointment Rota are appended to these Standing Orders and shall be published on the website of the Foundation, as referred to in Article 1.6. Notwithstanding the provisions of Article 6.3, Supervisory Board members shall retire on the dates stated in the Retirement and Reappointment Rota.

6.3 A member of the Supervisory Board shall retire prior to the date stated in the Retirement and Reappointment Rota if his or her performance is inadequate, if a structural conflict of interests is deemed to have arisen, or under any other circumstance where the Supervisory Board considers retirement to be appropriate, such as if the member is deemed to have acted in a manner inconsistent with the Constitution, regulations or resolutions of the Foundation. A member of the Supervisory Board may also retire voluntarily and for any reason, prior to the date stated in the Retirement and Reappointment Rota.

6.4 If a member of the Supervisory Board temporarily assumes executive responsibility in the event of the prolonged absence or incapacity of the executive officers, the member in question shall (temporarily) step back from the Supervisory Board.

Article 7 Remuneration

7.1 At least once every four years, the Supervisory Board shall determine the remuneration payable to the Chair and other members of the Supervisory Board, in light of recommendations made by the Selection, Appointments and Remuneration Committee. The remuneration payable to Supervisory Board members shall not be dependent upon the results secured by SIDN. If a Supervisory Board member is required to charge VAT in respect of his or her services, the VAT shall be paid by the Foundation. That was not the case at the time of the adoption of these Standing Orders. No member of the Supervisory Board may accept a personal loan or guarantee from SIDN.

7.2 Supervisory Board members shall be reimbursed for all reasonable expenses incurred in connection with the attendance of SIDN meetings and activities. Other expenses shall be reimbursable, in full or in part, only if incurred with the prior approval of the Chair; the Chair shall inform the Supervisory Board annually regarding such reimbursements.

7.3 The notes to the Annual Financial Statement shall include a complete and detailed account of the remuneration paid to Supervisory Board members, including amounts and structures.

Article 8 Supervisory Board meetings (agenda, electronic meetings, participation, minutes) and support

8.1 The Supervisory Board shall meet at least four times a year. Meetings shall ordinarily be held at the Foundation's offices, but may be held elsewhere or by electronic means. A member of the Supervisory Board may participate in and vote at a meeting by electronic means, providing that the member's identity is verifiable, and that the member is able to follow proceedings and vote in real time.

8.2 A resolution may be made only regarding a matter that appears on the agenda of the meeting, as communicated to all members of the Supervisory Board at least one week prior to the meeting, except where a meeting is called in circumstances judged by the Chair to be urgent, of which all members of the Supervisory Board have been made aware.

8.3 Meetings of the Supervisory Board shall be chaired by the Chair or, in the Chair's absence, by the Vice-Chair.

8.4 The business conducted at the meetings shall be minuted by the administrative secretary to the Supervisory Board. SIDN shall appoint an employee to act as administrative secretary to the Supervisory Board. The administrative secretary to the Supervisory Board shall manage the Supervisory Board archive and shall ensure that appropriate records of Supervisory Board meetings are kept. The minutes shall be presented at the next meeting of the Supervisory Board for the approval of the members present. Approved minutes shall be signed by the Chair and one other member of the Supervisory Board who was present at the minuted meeting.

8.5 If a Supervisory Board member is frequently absent from meetings, he or she shall be asked to provide an explanation.

8.6 Unless the Supervisory Board resolves otherwise, Supervisory Board meetings shall be attended by one or more members of the Executive Board, with the exception of meetings at which:

a) consideration is given to the performance of the Executive Board and of its individual members, and the conclusions that must accordingly be drawn;

b) consideration is given to the performance of the Supervisory Board and of its individual members, and the conclusions that must accordingly be drawn;

c) consideration is given to a potential conflict of interests involving a Supervisory Board member, as referred to in Article 9; or

d) the Supervisory Board holds discussions with members of SIDN's Staff Council.

8.7 The Foundation's external auditor shall be invited to attend any meeting of the Supervisory Board at which the audit, adoption or approval of the Annual Financial Statement is to be considered, unless the Supervisory Board deems attendance unnecessary in light of a recommendation by the Audit Committee.

Article 9 Conflicts of interest

9.1 A Supervisory Board member shall not participate in the consideration of or decision-making regarding any matter or transaction in which he or she has an interest that conflicts with the interests of SIDN, as referred to in Article 9.2. A member with a conflicting interest shall be discounted for the purpose of quorum determination. A transaction in which a Supervisory Board member has an interest that conflicts with the interests of SIDN shall be permissible, if approved, only under conditions that are at least equal to those that are normal within the industry and have been approved by the Supervisory Board. The Chair of the Supervisory Board shall ensure that all transactions in which conflicting interests exist are declared in the Supervisory Board's annual report, as referred to in Article 2.3, stating the existence of the conflicting interest and confirming compliance with the provisions of Articles 9.1, 9.2 and 9.3.

9.2 A conflict of interests between SIDN and a Supervisory Board member, which is of material significance for one or both parties, may exist if:

a) SIDN proposes to make a significant transaction or enter into a formal relationship with an organisation in which the Supervisory Board member in question has a direct or indirect personal financial interest;

b) SIDN proposes to make a significant transaction or enter into a formal relationship with an organisation whose supervisory board members or executive board members include the spouse, registered partner or other life companion, foster child or first or second-degree blood relative or relative by marriage of the Supervisory Board member in question;

c) SIDN proposes to make a significant transaction or enter into a formal relationship with an organisation for which the Supervisory Board member in question performs a managerial, executive or supervisory role.

9.3 A Supervisory Board member other than the Chair shall immediately inform the Chair of any potentially conflicting interest that the member has. A Supervisory Board member who has a (potentially) conflicting interest shall provide the Chair with all relevant information, including information relating the member's spouse, registered partner or other life companion, foster child or first or second-degree blood relative or relative by marriage, insofar as the conflict of interests involves any such person. The Supervisory Board shall determine whether a conflict of interests exists, without the relevant member present.

9.4 The Chair of the Supervisory Board shall immediately inform the Vice-Chair of any potentially conflicting interest that the Chair has. The Chair shall provide the Vice-Chair with all relevant information, including information relating the Chair's spouse, registered partner or other life companion, foster child or first or second-degree blood relative or relative by marriage, insofar as the conflict of interests involves any such person. The Supervisory Board shall determine whether a conflict of interests exists, without the Chair present.

9.5 The Chair of the Supervisory Board shall ensure that all relevant transactions are declared in the Supervisory Board's annual report, stating the existence of the conflicting interest and confirming compliance with the provisions of Article 9.5.

9.6 A conflict of interests involving the Foundation's external auditor may exist if:

a) the external auditor or the external audit firm undertakes work for SIDN other than audit work;

b) within the external audit firm, the same partner has overseen the audit of the Foundation, without rotation, for a continuous period of more than five years.

An Executive Board member or a Supervisory Board member shall immediately inform the Chair of the Supervisory Board of any potential conflict of interests involving the external auditor. An Executive Board member or a Supervisory Board member shall provide the Chair of the Supervisory Board with all relevant information regarding the potential conflict of interests. The Supervisory Board shall determine whether a reported circumstance constitutes a conflict of interests warranting reconsideration of the external auditor's appointment, or whether other corrective measures are required. The Chair of the Supervisory Board shall ensure that all such measures are declared in the Supervisory Board's annual report, stating the existence of the conflict of interests and confirming compliance with the provisions of Article 9.6.

Article 10 Whistleblowers

10.1 The Executive Board shall ensure that SIDN employees have the opportunity to report, without fear of adverse employment repercussions, any apparent irregularity of a general, operational or financial nature within SIDN to the sole Executive Officer or, if the Executive Board has multiple members, to the Chief Executive Officer, or to a member of staff to whom responsibility for the investigation of such matters has been delegated. The Executive Board or the member of staff to whom responsibility for the investigation of such matters has been delegated shall immediately inform the Chair of the Supervisory Board of any indication or suspicion of material malpractice or irregularity.

10.2 An SIDN employee may report any apparent irregularity involving the performance of a member of the Executive Board to the Chair of the Supervisory Board.

10.3 The Supervisory Board shall oversee the operation of the procedure for reporting (suspected) malpractices and irregularities, the appropriate and independent investigation of indications of malpractice or irregularity, and the proper implementation of recommendations regarding corrective action in cases where malpractice or irregularity is confirmed.

10.4 In order to ensure the independence of any investigation, the Supervisory Board shall be entitled to independently initiate and direct an investigation into any apparent malpractice or irregularity involving the Executive Board.

Article 11 Information, relations with the Executive Board

11.1 The Supervisory Board and its members have a collective and individual responsibility to ask the Executive Board or the external auditor to provide the Supervisory Board with all such information as the latter body may consider necessary for the proper fulfilment of its supervisory function. If the Supervisory Board considers it appropriate, the Supervisory Board may seek information from SIDN’s Data Protection Officer, Security Officer, other personnel or external advisors. The Executive Board shall provide the Supervisory Board with such resources as it may require in that context. The Supervisory Board may ask SIDN’s Data Protection Officer, Security Officer, other personnel or external advisors to attend its meetings.

11.2 The Executive Board shall promptly provide the Supervisory Board with all solicited and unsolicited information (where possible in written form) regarding matters and developments concerning SIDN that may be required by or advantageous to the Supervisory Board in the performance of its duties. The Executive Board shall provide the Supervisory Board with reports regarding contacts with external stakeholders, describing the nature, substance and results of those contacts, in order that the Supervisory Board may take those matters into account in the performance of its supervisory duties and may promptly and effectively anticipate the implications. Where necessary and in consultation with the Executive Board, the Supervisory Board may have independent contact with such stakeholders.

11.3 The Executive Board shall periodically provide the Supervisory Board with a report, formulated in a manner agreed from time to time between the two bodies, containing information regarding, amongst other matters, SIDN’s operational and financial circumstances, (developments in) domain name issuance policy, investments and personnel.

11.4 Notwithstanding the foregoing, the Executive Board shall annually provide the Supervisory Board with a budget for the year ahead, a recent statement of the Executive Board’s long-term plans and summary of SIDN’s strategic policy, a statement of the general, operational and financial risks to which SIDN is exposed, a statement confirming the existence of and describing the design and performance of SIDN's management and audit system, and a statement confirming compliance with all relevant legislation and regulations.

11.5 The Executive Board shall additionally append to the Annual Financial Statement an Annual Management Report describing its own performance and activities. The Annual Management Report shall include at least the information required by law and by the Standing Orders of the Executive Board.

11.6 If a member of the Supervisory Board comes into possession of information (from a source other than the Executive Board or Supervisory Board), which could assist the Supervisory Board in the proper performance of its duties, the member in question shall make the information available to the Chair of the Supervisory Board at the earliest opportunity. The Chair shall then determine whether and to what extent the information may be shared with the Supervisory Board as a whole.

Article 12 Confidentiality

Supervisory Board members shall exercise due discretion with regard to all information and documentation that comes into their possession in the context of their Supervisory Board membership, and shall respect the status of all confidential information. No member or former member of the Supervisory Board shall publish, make available to a third party or otherwise disclose outside the confines of the Supervisory Board or Executive Board any item of confidential information, unless SIDN has previously made the information public, or it is evident that the information is already in the public domain.

Article 13 Amendment

Notwithstanding the provisions of Article 1.2, the Supervisory Board may amend these Standing Orders by resolution. Any resolution to amend these Standing Orders shall be reported in the Supervisory Board's Annual Report.

Article 14 Applicable law and forum

14.1 These Standing Orders are governed by, and must be interpreted in the context of, Dutch law.

14.2 The Gelderland High Court shall be exclusively competent to hear any dispute relating to these Standing Orders, including any dispute regarding the existence, validity or rescindment of these Standing Orders).