Risk appetite
Governance: Supervisory Board
Continuing education
To supplement the existing focus on refresher courses for members of the Supervisory Board,
a new continuing education programme specifically designed for this group was launched
in 2010. A training programme was set up for this purpose in close consultation with the
Supervisory Board. The selection of topics takes account of current developments and the
expertise required within the Supervisory Board. Sessions on ICT policy and developments,
developments in the food and agri sector, and the future of the international financial sector
were held in 2010. Knowledge sessions on developments related to Basel III and risk
management are planned for 2011As part of the continuing education programme, the
members of the Supervisory Board pay working visits. In the spring of 2011, the Supervisory
Board will pay a working visit to a number of Rabobank offices in the United States to review
operations and the current state of affairs.
Individual job profiles
Starting in 2010, individual job profiles will be drawn up for all vacancies on the Supervisory
Board, including openings for the position of Chairman. The profiles describe the integrity,
expertise and availability required of the relevant Supervisory Board member. In addition, the
rules of procedure for the Supervisory Board and its committees were brought into line with
the Banking Code in 2010.
The Supervisory Board decided to broaden the responsibilities of the existing Audit
Compliance Committee, which has had the effect of further increasing the committee's focus
on risk-related matters. In line with this, in 2010 the name of the committee was changed to
the Audit, Compliance Risk Committee. The committee also changed its procedures so that
all risk-related matters are dealt with in a more systematic manner. As a consequence, both
the Audit, Compliance Risk Committee and the Supervisory Board will pay more attention
to risk management in future. The performance of the Supervisory Board and all of its
committees is reviewed once a year.
Risk management
In 2010, several procedures were tightened up and a number of internal rules on risk
management were amended in order to ensure full compliance with the risk management
provisions of the Banking Code.
The Executive Board of Rabobank Nederland receives periodic reports, enabling members
to keep a close eye on developments related to risk. These reports cover the group-wide risk
profile and pay attention to credit risk, market risk, interest rate risk, operational risk and the
funding profile. This ensures that the Executive Board is made aware in good time of the
material risks incurred by the bank. In 2010, Rabobank's policy on operational risk management
was revised and improved. This policy covers both the management of frequently occurring
incidents that result in small losses per incident (high-frequency/low-impact incidents) and
the prevention of unspecified or rarely occurring incidents that have a major impact and lead
to substantial losses per incident (low-frequency/high-impact incidents).
Risk management takes place within the boundaries of risk that Rabobank is prepared to
accept. Rabobank has formulated a specific policy on this risk appetite at group level. In 2010,
a risk appetite document was drawn up that complies with the Banking Code. This document
was adopted by the Executive Board and approved by the Supervisory Board. Rabobank's
strategy was taken as a starting point when preparing the risk appetite document. Rabobank's
risk appetite, which is linked to its core values is submitted to the Supervisory Board for
approval once a year and also whenever any material changes occur. No such changes
occurred during 2010.
Product approval
The product approval process was tightened up in 2010 to comply with the Banking Code.
This involved establishing a product approval process at group level, replacing the old system
under which the various group entities handled such matters independently. At the end of
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Banking code