Corporate governance Rabobank
Nederland
Executive Board
Supervisory Board
Member influence
Section 3:111 of the Financial Supervision Act, as imple
mented on 1 January 2007). This relationship is formalised
in an internal 'cross-guarantee' system, which stipulates that
if a participating institution has insufficient funds to meet
its obligations towards its creditors, the other participants
must supplement that institution's funds in order to enable
it to fulfil those obligations.
The Executive Board is responsible for the management of
Rabobank Nederland and its affiliated entities. This includes
responsibility for the achievement of the objectives of
Rabobank Group as a whole, its strategic policy, its results,
the synergy within the Group, compliance with all relevant
laws and regulations, the management of business risks
and the financing of Rabobank Group. The Executive Board
reports on all these aspects to the Supervisory Board, the
Central Delegates Assembly (the organisation's 'parliament',
which is authorised to take decisions on behalf of the local
Rabobanks) and the General Meeting of Rabobank
Nederland, which is formed by the members, i.e. the local
Rabobanks.
The management of Rabobank Group is also based on the
interrelationship between risk, return and reserves.
The Financial Supervision Act (Wft) and the subordinate
legislation based thereon, as well as regulations imposed by
the supervisory authorities - the Dutch Central Bank (DNB)
and the Netherlands Authority for the Financial Markets
(AFM) - have formulated standards for financial institutions.
The supervision on the bank's solvency and stability
(prudential supervision) is performed by DNB, while the
AFM has the supervision of the bank's conduct. Obviously,
these regulations form the framework for the organisation
and control of Rabobank Group's activities.
The members of the Executive Board are appointed by the
Supervisory Board for a five-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 has an advisory role in respect of the Executive
Board. In the performance of their duties, the members of
the Supervisory Board act in the interests of the stakeholders
of Rabobank Nederland and its affiliated entities. Certain
key Executive Board decisions are subject to Supervisory
Board approval. 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 independence 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 members of the Supervisory
Board up-to-date on developments in the institutional 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
Compliance Committee, the Appointment Committee, the
Remuneration Committee and the Appeals Committee.
An important precondition for good corporate governance
at Rabobank Group is an open culture with clear accounta
bility for the management and supervision. Without proper
Corporate governance 63