About this
Report
Chairman's
Foreword
Corporate
Management Report Appendices Governance
Consolidated Financial Company Financial
Statements Statements
extension of so-called "check-in" and check-out" sessions prior
to and after meetings to create focus in the meetings on the
critical issues, is welcomed;
The board wants to devote adequate attention to the strategic
topics, amongst others through the agenda setting and order,
the setting ofthe meeting and the preparation of documents
with key questions and dilemmas;
The Supervisory Board intends to increase its role and
responsibility in the process ofthe bank's transformation and
evaluation ofthe long-term strategic objectives and
cooperative principles and values.
Supervisory Board as Advisor
Strategy and Transformation
The bank's strategy is a staple topic on the board meeting
agenda. Every meeting addresses the relevant developments in
financial markets, society, and in the bank's business sectors. The
Managing Board and the Supervisory Board held two off-site
meetings in 2018, both in a local office in the Netherlands: once
in Limburg and once in Friesland.The off-sites provided in-depth
sessions on the development ofthe business in the Netherlands
and internationally, the organization, risk management,
digitalization and innovation. Other visits were also organized
with customers and local Rabobanks.
Over the course of 2018, the Supervisory Board encouraged the
Managing Board to prioritize the development of new business
models. The Supervisory Board is also acutely aware ofthe need
to manage a complex balance between time and investment in,
on the one hand, to the comprehensive transformation of
Rabobank's current processes and systems including enhancing
the control framework, and on the other, innovation and
digitalization that lead to new business models. The recurring
discussions, especially those about the control agenda, address
topics like leadership and ownership, setting challenging and
realistic deadlines, and the required time and investment each
target requires.
New Operating Model in Local Rabobanks: Bankieren 3.0
The Managing Board was created in 2017 after massive changes
to the organizational structure ofthe bank. With the
transformation of Bankieren 3.0, 2018 brought further
organizational changes to the Netherlands. Throughout the year,
the Supervisory Board followed and discussed the proposed
changes to the structure and management of our banking
network in the Netherlands. The board encouraged a
comprehensive consultation within the bank and with
representatives of General Members Council Boards to improve
the proposal and gain broad support. The board confirmed the
proposal for an optimum number of local Rabobanks to be set at
90, including a network of 300 client contact points, and the
concentration of certain specialized services in 14 network banks.
In its decision-making, the Supervisory Board challenged and
advised on various aspects ofthe proposed change. For exam pie,
we debated whether it adequately fulfilled the purpose ofthe
change: the continuation of banking nearby customers and the
market while providing better service and high-quality advice.
We also debated whether the bank can achieve its strategic goal
of supporting customers' sustainable growth and financial health,
while simultaneously adopting a digital-first strategy for a
growing number of primary banking transactions. The
Supervisory Board acknowledged that, while not a primary driver,
the change will certainly support the required improvements to
the bank's Cost/Income ratio and its compliance and control
agenda. Moreover, the Supervisory Board stressed the
importance of an appropriately timed and controlled transition
period to minimize potential disruptions for customers and
prolonged uncertainty for employees. Preparations for the
transformation, and the evaluation of transition risks and
mitigating actions received ample attention during 2018
meetings ofthe Supervisory Board as well. Since approving
Bankieren 3.0, the Supervisory Board has acted in an advisory
capacity in considering the thorough implementation plans, and
is following the roll-out with interest.
The Supervisory Board also welcomed a new initiative for product
and systems simplification and innovation as well as new ways
of working. The board supports the program, named
Simplify@scale, and recognized the required investments as a
necessary step towards innovation and digitalization, as well as
cost control.
Culture and Leadership
The transformation of Rabobank requires the identification and
promotion ofthe right leadership and culture for future-proof
banking. The development and promotion of leadership and
culture features in every meeting ofthe Supervisory Board's
Remuneration HR committee, and it is a regular topic in
discussions ofthe full board. Specific topics discussed in 2018
included the process of maintaining a delicate balance between
risk and compliance on the one hand, which requires strict
ownership and rigorous rules and procedures, and promoting
craftsmanship and leadership on the other, which works best in
an inspiring environment that embraces initiative taking. These
two priorities can sometimes seem at odds with each other. The
Supervisory Board participated in discussions about this balance
of limited freedom.The board also welcomed the bank's progress
in employee engagement and diversity and recognized it as a key
aspect in supporting leadership and culture changes. In updates
on the increased percentage of female managers in the bank, the
Annual Report 2018 - Corporate Governance
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