Current situation
The Executive Board is responsible for the management of the Company, which among other things means that it is responsible for the realization of the Company's goals, strategy, and policy and the ensuing development of profits.  In addition, the Executive Board is responsible for the Company's compliance with all relevant legislation and regulation, for managing the risks associated with Company activities, and for the financing of the Company. The Executive Board consists of one or more members, who are appointed by the General Meeting of Shareholders from a list of nominations drawn up by the Supervisory Board. These nominations can be binding or non-binding. If they are binding, the General Meeting may depart from them by a resolution passed by a majority of at least two thirds of votes cast, representing more than half the issued capital. If the nominations are non-binding, the General Meeting decides by simple majority. The General Meeting has the freedom to make appointments if the Supervisory Board does not produce a list of nominations, binding or otherwise, within the prescribed period.

In the General Meeting of Shareholders of 17 May 2006 a proposal for appointment of two new members of the Executive Board - Mr Friedrich Schneider and Mr Van der Klift - has been accepted, after which the Executive Board currently consists of four members.
Until 2006, the allocation of responsibilities was based on the geographical regions in which ARCADIS is active. The Netherlands, Other European countries and the 'rest of world' were the responsibility of a member of the Executive Board, while the Chairman had as area of special attention North and South America, as well as finances, strategy, human resources management, and communications. Mr Schneider will now be responsible for operations in South America and Asia and also for strengthening the infrastructure business of the company. Mr Van der Klift will serve as Chief Financial Officer. Click here for an overview of the current composition of the Executive Board.

Evaluation for the purposes of the Corporate Governance Code
Unless otherwise indicated below, ARCADIS subscribes to the principles related to "Role and procedure" (II.1), "Remuneration" (II.2) and "Conflicts of interest" (II.3) as formulated by the Tabaksblat Committee for management boards. ARCADIS also upholds the associated best practice provisions, albeit with the following provisions:

• The provision concerning to the maximum four-year term of office (II.1.1) will not be observed for the two members of the Executive Board, as their contracts stipulate that they have been appointed for an indefinite period. This complies with the Commission Tabaksblat, which in the preamble to its Code indicates that existing contracts will be respected. For new members of the Executive Board appointed as of 2005, the four-year term will be applied.
• The contracts of Mr Noy and Mr Jaski do not provide for severance pay (II.2.7). Consequently, in the event of involuntary dismissal, compensation will be determined in light of applicable statutory regulations, the grounds for dismissal, the salary amount, and the legal position of the person concerned as determined, inter alia, by length of service at the Company. For new members of the Executive Board appointed after 2005, a maximum will be established for severance pay.  

The status regarding a number of specific best practice provisions is as follows:

• The annual report 2003 contained, for the first time, a chapter on internal risk management and control systems (II.1.4) and the sensitivity of the results to external factors and variables (II.1.5).
• ARCADIS has a code of ethics (ARCADIS General Business Principles) that applies to all employees. In addition to this, certain senior financial employees and the Executive Board are required to abide by a Financial Code of Ethics. Both codes include whistleblower provisions (II.1.6).
• The current members of the Executive Board do not occupy any positions on supervisory boards of listed companies (II.1.7).
• ARCADIS has an option plan for members of the Executive Board and key people within the Company. Click here for an overview. Under the plan, options are allocated on the basis of performance criteria and can only be exercised three years after allocation, provided the person is still working for the Company at that time. This is a departure from provision II.2.1 but is in keeping with provision II.2.2. In May 2005, a number of amendments to the current ARCADS 2001 option plan were presented to the General Meeting of Shareholders in an effort to bring this option plan in line with the Code.
• The members of the Executive Board participate in the ARCADIS NV 2002 Employee Share Purchase Plan. Based on this plan, shares can be bought at a discount from the Lovinklaan Foundation (up to a maximum of € 400 per month). Share purchased under the Dutch section of this plan are to be held in lock-up for a period of four years (II.2.3). Click here for an overview of the plan.
• No personal loans, guarantees, or the like have been granted to members of the Executive Board (II.2.8).
• In 2005, at the proposal of the Supervisory Board, indemnification was granted to the Executive Board for costs related to their positions. 
• The remuneration report is included in the annual report (II.2.9) and is posted on the company's website.
• The existing ARCADIS NV Insider Trading Rules have been supplemented with a set of rules on ownership of, and transactions in, securities other than those of their own company by Executive Board members.

Action
The following action will be taken to comply more fully with the best practice provisions:

• The Executive Board is responsible for the design and functioning of the internal risk management systems. Although such systems are intended to optimally control risks, they can never, however well designed or functioning, provide absolute certainty that material losses, fraud or infringements of laws or regulations will not occur. In addition, a continuous consideration has to be made between possible measures for risk management and the cost related to the implementation of such measures.
  
  To comply with the stricter internal control standards that, among other things, result from Section 404 of the Sarbanes-Oxley Act, a system of unidirectional procedures and related controls for core processes was introduced in 2004 to manage risks. The internal control systems and procedures were evaluated, resulting in improved procedures and control points, which are now documented. The improved procedures will be tested in 2006. The goal is to complete the project with attestation by the external auditor. This attestation must be reported in the Annual Report on Form 20-F for the year 2006.
  
  In a separate section of this website, risks and risk management are discussed. That section describes the way in which ARCADIS manages risks. When additional or new risks occur, an investigation into the need for further adjustments in the risk management systems is made. In 2005, this led to improvements in specific procedures (reporting of third-party claims, GRiP® projects) and additional controls in specific financial systems. Based on experience to date, it is our opinion, that the current internal controls over financial reporting provide a reasonable level of assurance that this annual report does not contain any material inaccuracies and that these controls have properly functioned in 2005. We are confident that the aforementioned efforts to comply with Section 404 of the Sarbanes-Oxley Act will contribute to the improvement of internal risk management and control systems.
  
  The risks and risk management section of this website describes the sensitivity of results related to external conditions and variables.