have was considered. Succession planning is evidently an ongoing and adaptable process.
Upon each appointment or re-appointment, the areas of knowledge and experience and other
qualities and competencies deemed necessary at the time concerned to be able to perform
optimally as a collective Supervisory Board are reviewed. Furthermore, every year the
Supervisory Board evaluates the performance of the Supervisory Board as a whole and that of
its individual members. Further information on the activities of the Supervisory Board in 2013
can be found in the report of the Supervisory Board contained elsewhere in this Annual Report.
Risk management
Risk management is a central theme of the Dutch Banking Code. Rabobank Group's conservative
risk appetite stems from the sound objectives of stability and solidity that Rabobank has pursued
for many years. Moreover, Rabobank was also found to have controlled most of the risks
effectively during the recent years of economic and financial turmoil. Rabobank is continuing
its efforts to improve the quality of risk management practices and the risk culture within the
organisation. In further strengthening risk management in 2013, top-down and bottom-up risk
assessments and various stress tests were performed that included a more integrated analysis
of the different risk categories. A separate chapter on risk management can be found elsewhere
in this Annual Report.
Risk appetite
Rabobank has a tradition and a culture of prudent risk policy, as part of which it acts with
a keen awareness of risks and uses its scarce resources with caution and due consideration.
This prudence is applied in taking as well as in implementing strategic decisions. Rabobank
applies a risk strategy that is aimed at continuity.
Product approval
The product approval process is carried out at a group entity level. Since 2010, a group-wide
policy framework is in place to safeguard standardised working procedures and required
quality levels for the product range in all Rabobank Group entities. Products are not just
tested before introduction, modification or withdrawal, the full current product offering is
also periodically tested against current standards. Key criteria are whether the products still
meet the needs of customers and whether they are in their best interests. In this way,
Rabobank is taking responsibility for its relationship with customers and for the level of quality
it offers. Audit Rabobank Group periodically verifies whether the product approval process has
been designed properly, is in place and is working effectively.
Audit
The Executive Board has audits carried out by Audit Rabobank Group (ARG), which holds an
independent position within the organisation, to ascertain whether internal risk controls
(governance, risk management and control) meet the applicable requirements. Every year,
ARG performs audit procedures, based on an extensive risk assessment and an audit plan based
on this assessment, in order to establish whether the internal control and risk management
systems operate effectively. The director reports directly to the Chairman of the Executive Board
and has a direct reporting line to the Audit Committee of the Supervisory Board and/or its
Chairman. Tripartite talks between the external auditor, the Dutch Central Bank (DNB) and
Rabobank (including ARG) are held at least once a year. The matters that come up for discussion
at these meetings include risk assessments, the audit plan and audit findings. The Annual Report
includes a statement by the Executive Board to the effect that the internal risk management and
control systems are designed such that the financial reporting can be considered to be reliable.
111 Dutch Banking Code
