About this
Report
Chairman's
Foreword
Corporate
Management Report Appendices Governance
Consolidated Financial Company Financial
Statements Statements
Supervisory Board acknowledged the positive impact that the
enhancements already embedded in the control framework have
had, especially where risk ownership is concerned, for operational
risks and addressing audit findings.
In recent years, the Supervisory Board received continuous
updates about the developments leading to the settlement in
early 2018 between Rabobank National Association, its California
based subsidiary, and the United States Department of Justice
and other U.S. authorities for possible violations of the U.S. Bank
Secrecy Act and other regulations and statutes in relation to its
historical AML compliance program.The board was regularly
informed about this and discussed the improvement projects on
this topic with the Managing Board, the Compliance officer, and
U.S. management of Rabobank and its regulators.
Cyber security increasingly requires the attention of both the
Managing Board and the Supervisory Board. The board fully
supports the critical attention the Chief IT and Operations officer
pays to awareness training and the continuous and necessary
innovation of systems and processes. The board understands that
cyber security developments and the bank's response to the risks
they entail, also influence our approach to innovating and
simplifying the IT infrastructure and applications.
In 2018, the work to reassess applicable derivatives contracts and
recover Dutch customers under the agreed upon Derivatives
Recovery Framework continued. An ad hoc Derivatives
Committee of the Supervisory Board conducted a deep-dive into
the project. The ad hoc committee reviewed the progressandthe
measures taken and reported to the full board its view that the
bank is taking all possible measures and steps to communicate
with and recover customers appropriately within the agreed time
frame.
Derivatives Committee
Summary Supervisory Board Meetings Ad Hoc Derivatives Committee
General Responsibilities and Duties
Ad Hoc Committee of the Supervisory Board on interest rate derivatives recovery program
During the September 2018 meeting, the Audit Committee discussed the establishment of an ad hoc committee of the Supervisory Board for the interest rate derivatives
recovery program. The objective is to gain an unambiguous understanding of the file's background and essence, and to monitor whether the recovery program's targets
will be met. The ad hoc committee will regularly report findings of its assessment to the Supervisory Board.
Facts Figures
Members on December 31,2018 Other Attendees Throughout the Year
Jan Nooitgedagt, chair (100%)
Pascal Visée (100%)
Regular attendees:
Program Director for the interest rate derivatives recovery program and
Chariman of the steering committee for the interest rate derivatives recovery program
Meetings
The first meeting of the ad hoc committee was in October 2018. It met three times between then and December 312018. The members of the ad hoc committee also
paid an informative visit to the responsible officers of the Netherlands Authority for the Financial Markets (AFM).
The Supervisory Board adhoc committee on interest rate derivatives recovery program will continue to meet in 2019 but no more than once or twice.
Topics
Regular Topics of Discussion
Regular topics of discussion were the status and performance reports on the handling of files, the liaison with the financial supervisory and government authoritiesthe
cooperation with the external file assessor, and the monitoring of external communication.
In November 2018 the committee members gave an update to the other Supervisory Board members.
Rock-Solid Bank
The Supervisory Board is content with the continued progress in
2018 toward the financial targets of the 2016-2020 Strategic
Framework. Focus areas in the board's discussion included the
lagging performance on the profitability targets, especially the
Cost/Income ratio, and the measures planned and taken to
address the gap between performance and target. The Audit
Committee of the Supervisory Board analyzed the segment
budgets and their assumptions in detail. The Committee
challenged the plans for organizational changes to support cost
efficiencies. The Committee also gave its opinion on the analysis
and presentation of overhead costs. In its deliberations with the
Managing Board, the Supervisory Board discussed the
acceleration of investment in digitalization to strengthen the
business model innovation and the efficiency and simplification
of processes and systems against a decreased Cost/Income ratio
improvement in the short term.
The impact of regulatory changes is likewise important to
achieving ourfinancial targets.The Supervisory Board is regularly
updated on regulatory developments important to the bank and
the status of the bank's preparations and implementation to
address the changes in processes, systems and the impact on
reporting and financial targets. In 2018, the Supervisory Board
paid attention to the implementation of International Financial
Reporting Standard 9 regarding financial instruments accounting
in the bank's financial reporting.The board discussed the changes
and potential vulnerabilities that IFRS 9 implementation will bring
Annual Report 2018 - Corporate Governance
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