the banking landscape, and developments in the restructuring of banking activities. In addition,
issues of social relevance are the public debate on a banking tax, a level playing field for
financial institutions, pressure on mortgage and savings margins, and the debate about the
deposit guarantee scheme.
The Supervisory Board keeps close track of the execution of the strategy, and any envisaged
changes are discussed with the Executive Board. Monitoring of the consistency of decision
making concerning planned equity investments, acquisitions or disposals and their potential
impact on financial ratios have the Supervisory Board's full attention.
Within the boundaries of the strategic repositioning mentioned above, the Supervisory
Board approved, in 2010, Rabobank International's wholesale strategy 2010-2014 and its rural
and retail strategy abroad.
New arrangements were made with Eureko about continuing the successful partnership.
In light of these arrangements and given the provisions of Basel III concerning insurance
affiliates, Rabobank scaled down its interest in Eureko from 39% to 31%.
Changes to internal governance
In 2010, Rabobank aligned its internal governance to the provisions of new regulations
under the Dutch Corporate Governance Code, the Banking Code, the Principles for Controlled
Remuneration Policy issued by DNB and AFM, and the best practices propagated by NBA,
the Dutch Institute of Chartered Accountants. The Supervisory Board was directly involved
in this process.
Acquisitions and disposals
Rabobank acquired an equity interest in the Agricultural Bank of China in 2010 with a view
to furthering its strategic and commercial ambitions in China. As part of the growth strategy
in California, Napa Community Bank was acquired, and all deposits and specific assets and
liabilities of Butte Community Bank and Pacific State Bank were acquired from the Federal
Deposit Insurance Corporation (FDIC). In June 2010, Rabo Development and shareholders
of Banco Cooperativo Sicredi (Brazil) reached agreement about Rabo Development acquiring
a non-controlling interest in this bank.This transaction is currently still subject to local
regulatory approval. Via Rabo Development, Rabobank plans to further this bank's strategic
and commercial development. The equity interest in Indian-based Yes Bank was reduced from
15.9% to 4.9% because of the new India strategy. The activities of Bizner, an online bank for
businesses, were integrated into Rabobank.
Local Rabobanks
In 2010, the General Meeting approved the introduction of the Rabo Model as the governance
model for the local Rabobanks. The Executive Model and the Partnership Model have been
phased out since mid-2010 to be replaced by the Rabo Model.The Rabo Model starts from
professional collective management, robust and independent supervision by the local
Supervisory Committee on a cooperative basis and effective member influence, whilst
emphasising the connection between local and central governance. The Rabo Model fully
harnesses the influence, advisory and sparring partner roles of the member councils. Member
influence is further put into practice by establishing communities that are relevant to the
members. The Supervisory Board approved the amendment of the Articles of Association of
Rabobank Nederland to tailor them to the new governance model of the local Rabobanks.
The Cooperative Affairs Committee helped the Supervisory Board prepare for its decision
making on this issue.
The local Rabobanks continued to streamline their client services in 2010 based on the
'Rabobank 2010' programme. Rabobank Nederland assists the local Rabobanks in this drastic
operation and explores, in close dialogue with the local Rabobanks, how it can better gear its
organisation to the local Rabobanks' need for support. This is part of the 'Rabobank in the
Netherlands in 2011project.
Following an evaluation of changes made as proposed by the Committee for the Evaluation
of Internal Financial Relations, it was concluded that the internal financial relations between
Rabobank Nederland and the local Rabobanks are adequate and require updating in a limited
number of respects only.
103
Report of the Supervisory Board of Rabobank Nederland
