Corporate Governance
In January 2016, Rabobank switched to a new governance structure. All local cooperative
Rabobanks and Rabobank Nederland now operate as one cooperative bank with one banking
licence and one set of financial statements. All participants in local and collective governance
bodies had to get used to the new constellation. Members of these governance organs have
indicated in questionnaires taken over the past two years that, overall, they are satisfied with
the way the new regime is functioning. In the past two years, the new structure has proven its
value, strength and flexibility. The unique features of the member-based governance have never
changed, though. These include the bottom-up decision-making process, the associated focus on
retail banking with its relatively stable income streams and retained earnings as the primary source
of capital building. These features have safeguarded Rabobank's special position in the financial
sector, its long-standing focus on servicing the real economy and, last but not least, its ambition to
contribute to the sustainable development of local communities.
Contents Introduction Management report Appendices Corporate governance Consolidated Financial Statements Company Financial Statements
The governance bodies in short
The governance of Rabobank has never been static, but has
changed continuously in response to strategic considerations,
trends in society, as well as developments in banking and
regulation since the establishment of the first credit cooperative
in the Netherlands in 1895. Like previous governance regimes,
the new governance structure is founded on a balanced system
of closely interrelated and interacting bodies. This new structure
was designed by an internal Governance Committee which was
created at the beginning of 2014.The Committee consisted of
representatives of local supervisory bodies and chairmen of
local management teams, as well as Managing Board members
of Rabobank Nederland. Its ultimate proposals had to satisfy a
number of shared principles and rectify various shortcomings
in the previous framework.The governance review process took
about two years.
A defining feature of the new Rabobank governance is that the
cooperative part remains inextricably linked with the tactical
and operational banking business. The Figure below shows
the cooperative governance bodies (LHS) and the banking
business (RHS). Bottom-up decision-making entails that
member representatives ultimately approve the bank's strategic
frameworks. In the following section we will elaborate on the
main roles and responsibilities of the two sides of the new
governance.
Cooperative governance
Cooperatives are distinguished by the fact that clients can
become members, and members give cooperatives legitimacy.
Currently, more than 25% of our clients are members of a local
Rabobank.Their representatives in governance bodies exert an
important influence on the course of the local Rabobank as well
as the entire organisation. As a core feature of the cooperative
governance, membership has always led to divergent internal
dynamics and a different - strategic - orientation compared to
financial institutions with other ownership structures.
Members are divided into about 100 member departments at
the local level. Each department is assigned to one or more
delegates'election assemblies which appoint, suspend or
dismiss the members of the Local Members'Councils (LMCs),
consisting of 30 to 50 members, are the'eyes and ears'of the
management teams of the local Rabobanks. By bringing the
outside world to the table, the members serving on these
councils help keep the local Rabobank firmly on track. LMCs
have an important say in how cooperative funds are used.They
also act as a sparring partner for the managementteams of the
local Rabobanks, and have formal duties and responsibilities,
such as the right to approve the merger or demerger of a local
Rabobank or to advise the chairman of the local Rabobank's
managementteam on members'policy plan. LMCs monitor
the financial performance of local Rabobanks, the policies as
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