Contents Foreword Management report Corporate governance
The Governance Committee's approach eventually yielded
satisfactory results. Its solid and far-reaching proposals were
ultimately approved unanimously by the members' councils
of all 106 local Rabobanks on 2 December 2015. The local
cooperative banks approved this move one week later in the
General Meeting of Rabobank Nederland.
Salient aspects in 2016
All participants in the new governance have to get used to the
new structure. The approved new framework must demonstrate
its effectiveness and efficiency in practice. In two constituent
meetings of the General Members' Council (GMC), technical
issues regarding the functioning of the new governance and its
procedures were discussed and agreed upon.
The GMC is the highest decision-making body in the new
structure. It consists of chairmen of all local supervisory bodies,
who have the task of representing the members of their local
Rabobanks in the GMC. The GMC has around 100 members
and meets at least twice a year. It focuses on the strategy
and the identity of Rabobank including the cooperative, local
Rabobanks and all other group entities.
The GMC appoints members of the Supervisory Board of
Rabobank who appoint and supervises the Executive Board.
Both the Supervisory Board and the Executive Board are
accountable to the GMC.
During 2016, the GMC also considered the composition of its
three permanent committees: the urgency affairs committee,
the coordination committee and the committee on confidential
matters. The GMC also discussed the required competences for
committee members.
On behalf of the members, the GMC safeguards the continuity
as well as acts the custodian of collective values. It determines
the development of the cooperative and the decentralised
organisation and ensures adherence to the Articles of Association.
The GMC evaluates the governance and the banking business
on the basis of commonly agreed strategic principles.
To perform these functions, the GMC has several formal roles
and responsibilities. The GMC has the power to amend the
Articles of Association or change the legal status of Rabobank.
It adopts the Group's annual accounts and has advise and
approval rights for major decisions by the Executive Board.
For instance, the GMC determines the basic premises of
Rabobank's identity and strategic frameworks and the main
points of the annual plan and budget.
Consolidated Financial Statements Company Financial Statements Pillar 3
The Governance Committee monitors the practical functioning
of the new structure. Also, formal evaluations will be carried
out periodically by an independent institution to determine
whether all bodies are operating according to their envisaged
objectives and which aspects could be strengthened. The first
edition of the questionnaire investigated the importance the
participants attach to the specified functions of the governance
bodies and whether they expect that the underlying objectives
will really be achieved. The results from this baseline survey
indicate that the set-up and purpose of all governance organs
are generally well understood.
One particular aspect of the transition to the new regime
deserved some further elaboration though: the new associated
status of the local supervisory body (LSB). The LSB is appointed
by and accountable to its local member council. According to
Dutch Corporate Law, LSBs are no longer bodies that supervise
an independent legal entity with its own banking licence.
Instead the LSB is a body created by the Articles of Association
to which the Executive Board has delegated specific local
governance powers.
As already mentioned, LSB chairmen are key players in the
collective governance as they represent local members in the
GMC. At the local level, the LSB supervises the execution of the
strategy. In this light, the general state of affairs and (social)
performance of the local Rabobank, including its internal
financial reporting, must feature periodically on the LSB agenda.
This body is authorised to supervise the degree to which the
local Rabobank complies with external laws and regulations and
the Articles of Association.
Moreover, local supervisors are supposed to actively assess
whether the quality of the offered services satisfies the needs
of customers and members. They judge the extent to which
the local management team chairman satisfies his or her local
responsibility to focus on customers' long-term interests and
to contribute to the sustainable development of the local and
connection with the community. The functional employer's role
of the local management team chairman has been delegated
to the LSB, too. This responsibility encompasses appointing,
assessing and suspending the chairman. The LSB is also
authorised to approve a number of important local decisions.
Local members are the 'eyes and ears' and act as sparring
partner and the LSB must ensure that the local management
team chairman duly notes their advice in policy making.
Furthermore, the LSB has an advisory role with regard to the
local Rabobank management and fulfils a liaison role between
local society and the local Rabobank.
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