Our challenge is
to convert sustainability
into viable product
structures and ideas
right across the organi-
sation, which add
to communities and
benefit us and the
economy in general s
COVER STORY THE BANK'S ROLE TOWARDS SOCIETY
Sipko Schat
Sipko Schat:
Political debate
12 ISSUE 23 MAY 2010 RI WORLD
Since the collapse of the housing market in the United States
in 2007, which triggered a global write-down on the value of
securities iinked to house prices, the role banks play within society
has hardly been off the front pages. Although Rabobank emerged
from the crisis without serious damage, being a member of the
financial sector means having to deal with the fall out, Sipko
Schat says. "Being part of the industry, you can't simply sit on an
island and say that the rest of the world's wrong and that you're
right, no matter how well you've done. Having said that, I do feel
that banks are used as scapegoats for many topics - sometimes
correctly, although often incorrectly. What's clear is that there
were flaws in the system, and this means that the financial sector,
as an industry, will now be held accountable far more than it was
in the past - whether that's in relation to the business model it
uses, the remuneration packages it offers or the help it provides
to companies that are struggling."
S 7.7.
that we'll end up on the high side of the pay scale. What we
have done is alter our remuneration process, making it more
transparent and putting greater emphasis on deferral payments
based on performance and future results." Arjo Blok, who
heads up Global Financial Markets at Rl, is phlegmatic about
the controversy surrounding bankers' pay, noting that much
of the debate appears to have taken place through newspaper
headlines. 'There's not been a great deal of discussion about
the details," he says. "Although I feel that Rabobank has a fair
and transparent compensation model, I recognise some of the
challenges the industry faces. We need to find 'the new normal',
The role of banks will be further discussed in the public domain
for quite some time, Sipko Schat believes. Topics, such as
remuneration levels, remain high on everybody's agenda.
Nevertheless, "we've always paid our staff fairly, although
not extravagantly. However, if you employ staff in the major
financial centres - such as Tokyo, New York or London - your
compensation scheme has to be similar to those offered among
your peer group. We're fully aware of market trends, and we'll
continue to follow those trends, although this doesn't mean
and this will probably be a combination of both market
circumstances and local circumstances. I think both the
compensation model and the evaluation methods used need
to be measured over a longer period than is currently set, for
example over the normal run of business cycles, which will create
a more sustainable structure."
Rabobank has long focused on the need for sustainability, both