The Executive Board reports on all these aspects to the Supervisory Board, the Central Delegates
Assembly and the General Meeting of Rabobank Nederland, which is formed by the members, i.e. the
local Rabobanks.
The management of Rabobank Group is based in part on the interrelationship between risk, return
and capital. The Financial Supervision Act and the subordinate legislation based thereon, as well
as regulations imposed by the supervisory authorities - i.e. 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 - i.e. 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 four-year period,
but their contracts of employment are for an indefinite period. Reappointments likewise are for a period
of four years. Members 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.
Supervisory Board
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 all
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. Among other factors, 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 of the collective body's
performance and that of its individual members. Initiatives are developed regularly aimed at keeping
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.
Member influence
An important precondition for good corporate governance at Rabobank Nederland is an open culture with
clear accountability for the management and supervision. Without transparency, Rabobank Nederland
cannot render account to the local Rabobanks on its management and supervision, nor can this be
assessed. The local Rabobanks are members of the Rabobank Nederland cooperative. This membership
entails rights and obligations. The influence and control of the local Rabobanks are manifested through
their representation in two bodies: the Central Delegates Assembly and the General Meeting. Based on the
recommendations from an internal committee, the financial relationship between Rabobank Nederland
and the local Rabobanks was altered in 2008.This has led to an adjustment of Rabobank Nederland's
dividend policy. Other consequences included a redefinition of voting rights of the local Rabobanks.
The local Rabobanks can now vote according to a new formula at the General Meeting and through
indirect representation at the Central Delegates Assembly. Besides members, the local Rabobanks are
also Rabobank Nederland's shareholders.
79
Control aspects
