Relation between Rabobank Nederland and local Rabobanks Oversight of local Rabobanks Local Rabobanks Rabobank Nederland cooperative and its members Rabobank Nederland was established to support the local Rabobanks' banking business; in this capacity, it acts as a bankers' bank. In addition, Rabobank Nederland oversees the local Rabobanks, partly on behalf of the Dutch regulators. Membership of Rabobank Nederland is open only to banks that have a cooperative structure and whose Articles of Association have been approved by Rabobank Nederland. The local Rabobanks also hold shares in the capital of Rabobank Nederland. The local Rabobanks, for their part, also have members, i.e. a number of their locally based clients.The local Rabobanks have strictly defined rights and obligations towards Rabobank Nederland and each other. These are reflected in the governance structure. Where prudential supervision under the Dutch Financial Supervision Act is concerned, Rabobank Nederland oversees the local Rabobanks in accordance with its Articles of Association and by monitoring their control and the integrity of their business processes, outsourcing, solvency and liquidity. In addition, with respect to conduct-of-business supervision, the Dutch Ministry of Finance has designated Rabobank Nederland as a holder of a collective licence under the Dutch Financial Supervision Act. As a result, conduct-of- business supervision by the AFM is exercised through Rabobank Nederland. Cross-guarantee system within Rabobank Group Rabobank Group is comprised of the independent local Rabobanks, Rabobank Nederland, their umbrella organisation, and its group companies.Through their mutual financial association, various legal entities within Rabobank Group make up a single organisation.These legal entities have a mutual relationship of liability as referred to in Section 3:111 of the Dutch Financial Supervision Act. This relationship is formalised in what is known as an internal cross- guarantee system, which stipulates that if a qualifying institution should not have enough funds to meet its obligations towards creditors, the other qualifying institutions are required to supplement that institution's funds in order to allow it to fulfil these obligations. Corporate governance at local Rabobanks In mid-2010, the General Meeting of Rabobank Nederland decided to replace the different governance models that were optional for the local Rabobanks (Partnership Model and Executive Model) by a single new governance model: the Rabo Model. Every local Rabobank will amend its Articles of Association to be able to switch to this model in 2011Similar to the former governance models, the Rabo Model also safeguards effective member influence and control, and governance of the local Rabobanks will be carried out not only adequately and professionally, but also in a way that befits their cooperative culture. The members of all local Rabobanks have important powers under the Articles of Association (e.g. via the Member Council), including the power to adopt the financial statements, amend the Articles of Association, appoint supervisory directors, and grant discharge to the executive and supervisory directors, who are accountable to the members for their management and supervision respectively. Apart from the members' powers under the Articles of Association, the Rabo Model further enhances the bank's external orientation, for instance by encouraging and facilitating special-interest groups. Rather than originating from a structure, these groups have their own themes, dynamics and pace. The advantage of these groups is that they are flexible in structure, so that members can exercise influence on a broad spectrum of issues appropriate to the local context, and tailor their input as much as possible. Management Team A local Rabobank with the Rabo Model as its governance model has a multi-person Management Team made up of banking professionals, which has been appointed by the local Supervisory Committee subject to the approval of Rabobank Nederland. The Management Team, which is responsible for running the local Rabobank, is supervised by a local Supervisory Committee. 88 Annual Report 2010 Rabobank Group

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Annual Reports Rabobank | 2010 | | pagina 89