Transparency
52 Rabobank Group Annual Report 2004
Organisation and risk management
Corporate governance at the local Rabobanks
Only banks that have a cooperative structure and whose Articles of
Association have been approved by Rabobank Nederland may be
members of Rabobank Nederland. In turn, the local Rabobanks have
members as well, who are local clients. The local Rabobanks have
strictly defined rights and obligations towards Rabobank Nederland
and each other.
Management and supervision
In June 2004, the General Meeting of Rabobank Nederland cleared the
way for a change in the management model of the member Rabobanks.
This was prompted by the wish to change in response to, for example,
the local upsizing, which was well on the way by then, a changing
market, and increasing legislation and regulations. It was decided to
refocus the existing management model, i.e. the partnership model,
and in addition to introduce a second, 'executive' management model.
Both management models focus on ensuring effective management as
well as professional and independent supervision. They will remain in
equal, full coexistence in the coming years.
In this context, adequate assurance of effective member influence and
control is likewise essential in order to ensure that the management
of the local Rabobanks continues to be carried out in the future both
adequately and professionally, but also in a way that befits their coope
rative character. The members of all the local Rabobanks have important
powers, such as to adopt the financial statements, to amend the Articles
of Association, to appoint members of the Supervisory Board and to
grant discharge from liability. In addition, account is rendered to the
members in respect of the bank's management and supervision.
Partnership model
In the partnership model, the management of the local Rabobanks
consists of persons elected by the members from their ranks, plus a
managing director who is appointed by the Supervisory Board
(formerly the Board of Supervisors). The managing director is primarily
concerned with the day-to-day management of the bank's operations.
The Supervisory Board supervises the management. This model was
refocused in 2004, as part of which the roles and responsibilities of the
appointed and elected managers were redefined, the information pro
vision was improved and the supervisory role of the Supervisory Board
was strengthened. Banks using the partnership model may install a
members' council.
Executive model
In the executive model, the local Rabobanks have a Board of Directors
comprising several persons appointed by the Supervisory Board, which
operates under the supervision of the Supervisory Board. In this model,
no managers are elected by the members from their ranks, as is the
case in the partnership model. In order to firmly and permanently
embed member influence and control in the structure, banks using
the executive model install a members' council, which is a delegation
of all members elected by the members from their ranks. The members'
council assumes the bulk of the powers of the General Meeting and
furthermore promotes and structures member control and engagement.
The General Meeting continues to exist, but decides on major issues
only.
An important precondition for good corporate governance at Rabobank
Group is an open culture with clear accountability for the management
and supervision. Without proper transparency, Rabobank Nederland
cannot render account to the local Rabobanks on its management and
supervision, nor can this be assessed.
Investor relations
Besides good communication with its members, Rabobank Nederland
also attaches great importance to good communication with its other
stakeholders. For example, institutional investors are invited to parti
cipate in teleconferences held on the day that the annual or half-year
figures are published. The investor relations unit informs investors on
developments at Rabobank Group via a dedicated website and an
electronic newsletter. This unit is also responsible for supplying and
explaining all relevant information requested by investors.
Communication with the local Rabobanks
A closed Internet connection created specifically for the local Rabobanks
gives them access to fast and useful information and enables them to
be closely involved in Rabobank Nederland.
Corporate governance information on the Internet
Rabobank Group has placed information on its corporate governance
and activities on its public Internet site, including a full explanation
of the deviations from theTabaksblat Code. While Rabobank Group
endorses the Code's principles and implements them where possible, a
number of principles and best practice provisions cannot be applied at
Rabobank Group on account of its cooperative structure.
