Contents Foreword Management report Corporate governance Consolidated Financial Statements Company Financial Statements Pillar 3
The ambition to strengthen Rabobank's cooperative identity is
firmly embedded in the overall strategy, but switching to the
new regime reinforced our awareness that member engagement
and involvement are essential to a cooperative bank. In order to
bolster a solid foundation of these characteristics for the future,
Rabobank has established a Youth Forum. This body consists of
one young member representative from each local Rabobank.
A permanent dialogue with this member category is considered
very important for the future development of the bank. At the
same time, it is a step towards achieving Rabobank's goals for
better reflecting diversity in society in its governing bodies,
which are still too homogeneous. To achieve more diversity,
our corporate governance needs to include more women and
young people as well as a wider variety in ethnic and cultural
backgrounds. After all, being a meaningful cooperative bank
for all members and all of society is one of our key strategic
objectives.
To address tactical, operational and policy-related banking
issues in the new governance, the Directors' Conference was
established. This body is composed of local management team
chairmen, the Executive Board and the directors of divisions
which support local Rabobanks. The Directors' Conference
is a meaningful and influential platform with a preparatory,
informative and advisory role for proposals and policies
concerning local Rabobanks. The Conference also fulfils a liaison
role between the highest echelons of the bank. It is tasked with
safeguarding customers' interests and needs. Every meeting of
the Conference is devoted to a specific theme of the strategic
agenda. This year, the Conference paid considerable attention
to proposals regarding 'The Bank of the Future'. Other topics
included the integral F&A value chain and Rabobank's role
therein as well as Rabobank's contribution to social-economic
developments.
External reactions
Rabobank's historic step has attracted considerable outside
attention. Some European cooperative bankers, academics
and financial analysts have questioned the expressed motives
and intentions of the governance reform. Some see the
merger as a centralisation in disguise. In their opinion, the
new governance will weaken the independent position and
autonomy of local Rabobanks. These sceptics fear that the
new governance strikes at the very roots of the organisation's
cooperative nature.
Indeed, the move to one banking licence has made some
activities at local Rabobanks redundant. Merging local back
office activities at the collective level yields efficiency gains
for the entire organisation, but unfortunately necessitates
a considerable loss of employment. The remaining local staff
will, however, be less burdened with administrative duties.
They can now focus more closely on the customer and the
market, while intensifying their participatory activities in local
communities. Rabobank believes that both elements will
reinforce the local orientation rather than weaken it.
Furthermore, it is worth noting that the completely redrafted
Articles of Association and internal rules are meant to secure
local autonomy. While it is true that the Executive Board now
has the ultimate responsibility for the integral banking business
(including all activities of local Rabobanks) in the new structure,
our internal rules stipulate that local Rabobanks have their own
responsibilities. In fact, they have been granted mandates from
the Executive Board to safeguard their local orientation and
firm anchoring in local communities. Local supervisory bodies
as well as local management team chairmen can exercise their
authority and responsibility to deliver high quality local banking
services. They also have the opportunity to turn the concept
of cooperative identity into reality at the local level. Certainly,
Rabobank acknowledges that the cooperative identity we hold
so dear should be made more visible and tangible in practice.
In this respect, we have to do more to live up to our claims
regarding local autonomy and independence.
Some European financial cooperatives argue that (inter)national
supervisors could view Rabobank's new framework as a blueprint
for the governance structures of their own organisations.
We cannot speak to the accuracy of this claim, but we do know
that all cooperative banks have followed unique evolutionary
paths since their establishment many decades ago. Governance
changes are time and path dependent. They follow or pre-empt
major trends in society and banking. Numerous contextual
factors have shaped Rabobank's governance structure - and
business model - over the course of time, which also explains
why our current governance differs so greatly from that of all
other cooperative banking groups in Europe. So, taking unique
situations and circumstances into account, Rabobank would
not recommend just copying and pasting its governance model
onto other cooperative banking groups.
Dutch Corporate Governance Code
The Dutch Corporate Governance Code applies to listed
companies and contains principles and best practice provisions
for what is generally regarded as good corporate governance.
Because of its cooperative structure, Rabobank is not required
to comply with the Dutch Corporate Governance Code,
but only departs from it on a few points, partly due to its
cooperative structure.
O For additional information about this, please refer to
www.rabobank.com.
152 Rabobank Annual Report 2016
