Supervisory Board
Central Delegates Assembly
51 Rabobank Group Annual Report 2005
Organisation and risk management: Rabobank Group Corporate Governance
The management of Rabobank Group is also based on the interrelation
ship between risk, return and reserves. The supervisory authorities - the
Dutch Central Bank and the Netherlands Authority for the Financial
Markets - have formulated standards for financial institutions. The
standards of the Dutch Central Bank are laid down for example in the
Regulation on Organisation and Control, which forms the framework for
the organisation and control of Rabobank Group's activities. In addition,
the supervision on the conduct of the Dutch financial markets exercised
by the Authority for the Financial Markets also applies to Rabobank Group.
The members of the Executive Board are appointed by the Supervisory
Board for a 5-year period but their contracts of employment are for an
indefinite period. They may be dismissed and suspended by the
Supervisory Board. The Supervisory Board determines the remuneration
of the members of the Executive Board and reports on this to the
Committee on Confidential Matters of the Central Delegates Assembly.
The principles of the remuneration policy for the Executive Board, as
recommended by the Supervisory Board, are established by the Central
Delegates Assembly. Finally, the Supervisory Board periodically assesses
and follows up on the Executive Board's performance.
The Supervisory Board performs the supervisory role within Rabobank
Nederland. This means that the Supervisory Board supervises the policy
pursued by the Executive Board and the general conduct of affairs of
Rabobank Nederland and its affiliated entities. As part of this task, the
achievement of the Group's objectives, the strategy, business risks, the
design and operation of the internal risk management and control
systems, the financial reporting process and compliance with laws and
regulations are discussed at length and tested regularly. In addition, the
Supervisory Board advises the Executive Board. In the performance of
their duties, the members of the Supervisory Board act in the interests
of Rabobank Nederland and its affiliated entities. Certain key Executive
Board decisions are subject to prior approval by the Supervisory Board.
Examples include decisions on strategic collaboration with third parties,
major investments and acquisitions, as well as the annual adoption of
policy plans and the budget.
The members of the Supervisory Board are appointed by the General
Meeting on the recommendation of the Supervisory Board. The inde
pendence of the individual members is an important consideration in
this respect. The Committee on Confidential Matters of the Central
Delegates Assembly determines the remuneration of the members of
the Supervisory Board and has a say in the profile of the members of
the Supervisory Board.
The Supervisory Board annually assesses its own performance, in terms
both of the collective body's performance and that of its individual
members. Initiatives are developed regularly in order to keep the mem
bers of the Supervisory Board up-to-date on developments in the insti
tutional and legal environment in which the bank operates and on risk
management systems. The Supervisory Board has five committees: the
Cooperative Issues Committee, the Audit Committee, the Appointment
Committee, the Remuneration Committee and the Appeals Committee.
The local Rabobanks are members (and shareholders) of Rabobank
Nederland. Influence and control of the local Rabobanks are exercised
via direct and indirect representation on two bodies, the Central
Delegates Assembly and the General Meeting.
The local Rabobanks are organised geographically in 20 regions. The
Boards of the Regional Delegates Assemblies form the Central Delegates
Assembly, which has 120 members. Through the representation of the
local management and supervisory bodies in the Regional Delegates
Assemblies, the members/clients of the local Rabobanks are represented
in the Central Delegates Assembly.
The powers of the Central Delegates Assembly include the establishment
of rules that all local Rabobanks must comply with. The Central Delegates
Assembly also approves the annual plan and the budget of Rabobank
Nederland insofar as this concerns the business of the local Rabobanks.
The outcome can influence Rabobank Nederland's policy. Furthermore,
the Central Delegates Assembly has substantive discussions which
mainly concern the business of the local Rabobanks. These discussions
are held not only as part of the Central Delegates Assembly's specific
duties and powers, but also with the aim of encouraging commitment
and consensus between the local Rabobanks and Rabobank Nederland.
Consequently, the manner in which Rabobank Nederland accounts for
its policy to its members is more extensive than the account rendered
by a typical listed public company to its shareholders. Because of the
special relationship between Rabobank Nederland and its members, the
Central Delegates Assembly enjoys virtually full attendance.
In order to operate effectively, the Central Delegates Assembly has
appointed committees, which are charged with special duties. They are:
the Committee on Confidential Matters (advises on appointments and
assesses the Supervisory Board's application of the remuneration policy),
the Central Delegates Assembly Co-ordination Committee (draws up
the agenda of the Central Delegates Assembly and subjects items for
the agenda to formality compliance tests) and the Committee on
Urgent Matters (acts on behalf of the Central Delegates Assembly in
urgent cases).
