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.
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Annual Report 2010 Rabobank Group