Fortis and the Lippens Code

Fortis is applying all the Code’s main principles, in line with the commitment we made last year. Two items require more detailed explanation:

• Principle 2.3: Independence of directors The Lippens Code states that: “To be considered independent, a director should be free from any business, close family or other relationship with the company, its controlling shareholders or the management of either that creates a conflict of interest such as to affect that director’s independent judgement.” The phrasing of this principle generally requires little comment. Questions may be raised, however, regarding its implementation and the way specific criteria in respect of a director’s independence are formulated. The Lippens Code, the Tabaksblat Code, Article 524 of the Belgian Companies Act and the recommendation of the European Commission of 15 February 2005, for instance, all set out criteria which, if not actually contradictory, nevertheless differ from one another. For that reason, we have opted for our own criteria at Fortis, as set out in our Governance Statement. These match those of the Lippens Code, with the exception that Fortis considers it necessary to limit the restrictions on cross-directorships to listed companies.
  
• According to principle 7.18, the annual report should describe the main contractual terms of hiring and termination arrangements with executive managers. The remuneration policy for Fortis directors and Executive Committee members – described in detail in note 12 of our Financial Statements – sets out the main terms included in our contract with executive managers. This policy states that, for the future, executive managers will receive compensation equal to two times their base salary in the event that a contract is dissolved on Fortis’s initiative. However, existing contracts, each of which was agreed in an earlier period and a specific set of circumstances, will be honoured.