Employee influence
Corporate governance
at the local Rabobanks
Management and supervision
Partnership model
Executive model
Member council
Articles of Association and regulations, and the appoint
ment of members of the Supervisory Board. The Central
Delegates Assembly issues advice prior to the General
Meeting on all the items on the agenda. This procedure
ensures that, prior to the General Meeting, these subjects
have been discussed in detail on a local, regional and
central level. The local Rabobanks have voting rights in the
General Meeting in proportion to their balance sheet total.
Because of the special relationship between Rabobank
Nederland and its members, the General Meeting enjoys
virtually full attendance.
In 2005, a new employee representative body was created:
the Group Staff Council of Member Banks (GOR AB), which
acts as a discussion partner to the manager on issues that
concern the social policy of all local Rabobanks. The
creation of the GOR AB does not affect the position of
Rabobank Nederland's Works Council or the existing Works
Councils of the local Rabobanks. As a result, they continue
to act in full as employee representative bodies within the
meaning of the Works Councils Act.
Only banks that have a cooperative structure and whose
Articles of Association have been approved by Rabobank
Nederland can 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.
Pursuant to the prudential supervision part of the Financial
Supervision Act (Wft) and under Rabobank Nederland's
Articles of Association and the Articles of Association of the
local Rabobanks, Rabobank Nederland supervises the local
Rabobanks on (the integrity of) their operations, solvency
and liquidity. In addition, under the conduct supervision
part of the Wft, Rabobank Nederland has been appointed
by the Dutch Finance Ministry as the holder of a collective
license that also includes the local Rabobanks. Thus, the
supervision of conduct by the AFM is exercised through
Rabobank Nederland.
Since June 2004, two governance models are possible for
the local Rabobanks. The introduction of a second governance
model - the executive model - besides the existing partnership
model was prompted at the time by the wish to respond to
internal and external changes, for example, the local scaling
up, which was well on the way by then, a changing market,
and increasing legislation and regulations. Both governance
models focus on ensuring effective management as well as
professional and independent supervision. They will continue
to exist alongside each other in the coming years as equally
valid alternatives. The effectiveness of both models will be
reviewed in 2008.
Since both governance models provide assurance of
effective member influence and control, the governance
of the local Rabobanks will continue to be carried out both
adequately and professionally in the future, but also in a
way that benefits their cooperative character. The members
of all the local Rabobanks have important powers, for
instance 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.
In the partnership model, the Board of each local Rabobank
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.
In the executive model, each local Rabobank has 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.
Local Rabobanks using the executive model must institute
a member council in order to firmly and permanently
embed member influence and control in the structure.
Many banks using the partnership model have established
a member council as well. The member council is a
delegation of all members elected by the members from
their ranks. The member council assumes the bulk of the
powers of the General Meeting and promotes and structures
member control and engagement. The General Meeting
Corporate governance 65
