Financial crisis
Rabobank Group operated in a turbulent environment in 2008. The mortgage crisis in the United States
escalated into a global financial crisis. The financial markets showed a reaction of unprecedented shock.
All over the world, the policies of banks and other financial institutions were challenged. Both the
national and the international banking landscapes changed rapidly. The effects are making themselves
felt in the real economy as well.
The financial crisis created a test for the Supervisory Board's supervision and its effectiveness in 2008.
Following preparatory work by the Audit Compliance Committee, the Supervisory Board closely
monitored developments. During the first half of the year, the Audit Compliance Committee was
very closely involved in monitoring Rabobank Group's position. This included regular and intensive
discussions with the Executive Board. In this context, frequent attention was paid to the situation in the
financial markets in general, the solvency and liquidity development at Rabobank Group, the effects on
the profit and loss account, the operation of the control and management mechanisms, concentration
risk and systemic risk. The Supervisory Board made a thorough analysis of the situation and concluded
that the Executive Board has gained learnings from the events and that the new insights have meanwhile
been embedded in the organisation. Examples include the limitations to Rabobank International's use of
the balance sheet and the linking of staff bonuses in some business units to longer result periods.
Local Rabobanks
The Supervisory Board is pleased to find that the local Rabobanks made further progress with the
Rabobank 2010 programme in 2008. Under this programme, which is now available to all local Rabobanks,
customer service is improved further by means of process optimisation.
The terms of reference of the internal Governance Models Review Committee were discussed
extensively in Supervisory Board meetings. The review focuses on the performance of the Executive
model and the Partnership model at local Rabobanks in terms of governance issues - such as collegiate
management, roles and responsibilities of the local Supervisory Boards and the link between local and
central governance - and on the Member Councils' performance. The emphasis will be on best practices
and potential scope for improvement of the governance models.
Portfolio reshuffle in the Executive Board
On 19 June 2008, the General Meeting took formal leave of Executive Board member Mr Ten Cate, who
retired on 1 July 2008. The Supervisory Board is grateful to Mr Ten Cate for his constructive contribution
to the Executive Board's performance and praises him for his pioneering role in the area of sustainability
and particularly for the expansion of services to corporate clients.
After careful consideration, the Executive Board and the Supervisory Board decided not to appoint
a successor for Mr Ten Cate as yet, but to reshuKI e the portfolios within the Executive Board.
Starting 1 July 2008, Mr Heemskerk was appointed Chairman of the Managing Board of Rabobank
International. The portfolio changes for the other members of the Executive Board were relatively limited.
Special Credit Management was added to Mr Bruggink's responsibility area, while Mr Moerland was made
accountable for CSR issues. There were no changes in the portfolios of Mr Schat and Mr Van Schijndel.
The Supervisory Board closely considered how to provide for the chairmanship and the composition
of the Executive Board in mid-2009, when Mr Heemskerk will reach the retirement age. Early in 2009,
the Supervisory Board's decision was announced that Mr Moerland will hold the position of Chairman of
the Executive Board following Mr Heemskerk's retirement. The Supervisory Board has yet to decide on
Mr Moerland's succession and any further portfolio allocations.
Strategic developments
The future growth of Rabobank Group's activities was once more reviewed against the backdrop of the
greatly changed market conditions. In 2008, a Group-wide study team including representatives from
local Rabobanks, subsidiaries, Rabobank International and Rabobank Nederland gave considerable
thought to an adjustment of the Strategic Framework. This, and the financial consequences of the
options proposed, was discussed at length during the Supervisory Board meetings.The Supervisory
Board concluded that the adjusted Strategic Framework offers excellent opportunities to guarantee a
strong market position, both nationally and internationally, for Rabobank in the years to come.
The Supervisory Board also reviewed the activities of Rabo Development. Having completed the
acquisition of a 40% share in Banco Regional in Paraguay and a 35% interest in Banque Populaire
du Rwanda, Rabo Development now has a total of six partner banks, in Tanzania, China, Zambia,
Mozambique, Paraguay and Rwanda. In 2008, several Supervisory Board members took part in a study
trip to Tanzania together with SME clients.
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Rabobank Group Annual Report 2008
