14 Corporate governance
This chapter contains a review of the members of the Management Board and the Supervisory Board, followed with an outline of the application of the Dutch Banking Code that applies to SNS Bank NV. The chapter concludes with the required statements.
Because the governance framework of SNS Bank NV is an integrated part of the governance framework of SNS REAAL we refer for more detailed information on Corporate Governance, the Management Board and the Supervisory Board to SNS REAAL’s Annual Report 2013.
14.1 Management Board
As of the date of publication of this Annual Report, the Management Board of SNS Bank NV comprises of the following members:
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Dick Okhuijsen (Chairman)•
Maurice Oostendorp•
Wim Henk SteenpoorteMore information on the Board members can be found in the Annual Report of SNS REAAL 2013.
14.2 The Supervisory Board
As of the date of publication of this Annual Report, the Supervisory Board of SNS Bank NV comprises the following members:
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Jan Nooitgedagt (Chairman)•
Charlotte Insinger•
Monika Milz•
Jos Nijhuis•
Jan Nijssen•
Jan van Rutte•
Ludo WijngaardenMonika Milz is a German national. All other members of the Supervisory Board are Dutch nationals.
The Supervisory Board has formed three committees from among its ranks. As of 31 December 2013, said committees comprised the following members:
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Audit Committee: Jos Nijhuis (Chairman), Jan Nooitgedagt, Ludo Wijngaarden and Jan van Rutte.•
Remuneration and Nomination Committee: Ludo Wijngaarden (Chairman), Jan Nooitgedagt, Charlotte Insinger and Monika Milz.14.3 Banking Code
The mission, core value and strategy of SNS Bank NV (SNS Bank) confirm the principles of the Banking Code (the Code).
14.3.1 Contributions to restoring confidence in the financial sector
The Code is aimed towards restoring confidence in the financial sector and improving the functioning of the sector. This is obviously also one of SNS Bank’s objectives. SNS Bank accomplishes this by complying with this Code and its mission, core value and strategy. SNS Bank continually undertakes initiatives to restore trust in the financial sector and to improve the functioning of the sector.
14.3.2 Application code by SNS Bank
The banking activities of SNS REAAL NV (SNS REAAL) are carried out by SNS Bank. The Code is applicable to all of these banking activities and came into force on 1 January 2010. Even before that date, in 2009, SNS REAAL (at Group level) started applying the Code. From that moment on, SNS Bank aimed at applying the Code for all its activities. Because SNS REAAL operated as an integrated bank and insurance group during 2013, some of the measures taken to comply with the Banking Code are implemented at the group level.
SNS Bank complies almost fully with the Code. SNS Bank and its employees carefully monitor compliance and try to further improve it, in line with the execution of SNS REAAL’s mission of ‘Simplicity in finance’ and core value CARE!
14.3.3 SNS Bank applies Code to all activities
Right from the start of the implementation of the Code, SNS REAAL (at Group level) applied the Code almost completely to all of its banking activities. Some examples are:
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SNS REAAL’s mission of ‘Simplicity in finance’ starts from putting its customers and its customers’ interests first in accordance with the Code.•
The remuneration policy of the Executive Board of SNS REAAL and senior management complies with both the Code and applicable laws and regulations.•
SNS REAAL’s Executive Board and senior management signed the moral-ethical statement in March 2013 and also pledged the so-called Bankers’ oath, pursuant to the new regulations. The principles included in this statement provide all SNS REAAL employees with an ethical framework to guide them in their conduct.•
SNS REAAL has a continuous education programme in accordance with the principles of the Code.•
The Product Approval and Review Process has been implemented in all relevant business units in accordance with the Code and audits are carried out in these business units each year.•
The risk management organisation of the entire SNS REAAL Group is compliant with the principles of the Code and evolves continually. Chapter 10 discusses relevant developments in the field of risk management.•
The internal audit function is organised at Group level (SNS REAAL), is compliant with the Code and evolves continually.With effect from the 2013 financial year, the application of the Code will no longer be reported for at Group level (SNS REAAL), but by SNS Bank itself. With respect to the application of the Code, SNS REAAL’s Annual Report refers to the Annual Report of SNS Bank.
14.3.4 Up-to-date overview application of the Code in practice
SNS Bank provides on its website an up-to-date overview of the manner in which SNS Bank and SNS REAAL and its business units respectively implement and apply the Code’s recommendations.
14.3.5 Compliance with the Code
SNS Bank complies almost fully with the Code. On just a limited number of points it is not (yet) possible for SNS Bank to meet compliance requirements:
As a result of the nationalisation on 1 February 2013, Gerard van Olphen and Maurice Oostendorp joined the Executive Board of SNS REAAL. By virtue of that position, Mr Van Olphen was appointed chairman of the Supervisory Board of Propertize BV (formerly called SNS Property Finance) and Mr Oostendorp was appointed chairman of the Supervisory Board of SNS Securities NV. In the light of the nationalisation, no profiles were drawn up with regard to those
appointments.
With respect to the remuneration policy, a number of employees falling within the scope of the Policy act and Regulation on Sound Remuneration policies pursuant to the Financial Supervision Act (Besluit Beheerst Beloningsbeleid Wft 2011) have yet to accept the policy set for them in writing. The policy has, however, been fully adopted and implemented. At the level of the entities of SNS Bank’s most important subsidiaries, further improvements to Code compliance are possible. For instance with respect to the evaluation of the supervisory boards of these entities (recommendation 2.1.10), participation of all directors in the continuous education programme (recommendation 3.1.4), maximisation of severance pay of some directors as a result of existing contractual arrangements (recommendation 6.3.2), and setting up an audit and risk committee for the supervisory boards of these entities (recommendation 2.2.1).
14.3.6 Putting customers and customer's interests first
The Code’s recommendations aimed at the organisational culture, such as putting customers first and carefully
considering the interests of all SNS Bank’s stakeholders in question (section 3.2 of the Code) are abstractly formulated. Implementation and compliance with these recommendations can therefore - by definition – only be objectively verified to a certain extent.
SNS Bank is convinced that these recommendations are embedded in the culture of all of its business units and receive constant attention from senior management and employees of SNS Bank. Putting customers and customers’ interests first is part of SNS Bank’s strategy and is embedded in the mission of ‘Simplicity in finance’ and core value CARE! Due care is exercised by considering the interests of all of SNS Bank’s stakeholders.
Putting customers first is part of employees’ performance appraisal and of the Product Approval Process for existing and new products. Business units are required to report to SNS Bank’s management team how they put customers first. The implementation of these recommendations from the Code is discussed in more detail in other sections of this Annual Report.
14.3.7 Continuing education and competence Supervisory Board, Management Board and senior
management
14.4 Management statements
The members of the Management Board state the following:
14.4.1 In-control statement
The Management Board of SNS Bank NV hereby declares that it has ascertained, with a reasonable degree of assurance, that the material risks SNS Bank NV is facing have been described. This assurance is based on the risk management organisation described in Chapter 19 on Risk Management and Organisation. The effectiveness of essential control measures is reviewed at regular intervals. SNS Bank NV has established a structured process of internal In-control statements with corresponding evaluation by senior management. The following material risks have been identified for SNS Bank NV as a whole:
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SNS Bank NV is still prone to reputation risks as a result of the nationalisation of the company. The same applies to certain dossiers (Property Finance). Given the uncontrollable nature of the (social) media this is something that requires ongoing attention.•
Computer crime (cybercrime) continued to increase in 2013. This is a development that also affects SNS Bank NV and its customers. Computer crime is a phenomenon that is clearly here to stay. As such, it needs to be tackled by a broad-based and effectively coordinated collaborative effort. SNS Bank NV is actively involved in this endeavour (together with parties such as ECTF and NVB), and monitors developments closely, taking appropriate measures where necessary.•
The execution of splitting SNS REAAL into independent banking and insurance operations also has consequences for the personnel. The implementation of the necessary changes will increase their workload. SNS REAAL has chosen to adopt a rapid and meticulous approach and will remain in close contact with its personnel throughout the process.Notwithstanding the considerable increase in workload, SNS Bank's management devoted attention to managing the various risks to which the company is exposed. The changing external environment, new laws and regulations (Basel II/III), an increased number of inquiries from regulators and regulatory requirements, the necessary focus on the
business unit Property Finance, necessary investments in the data warehouse infrastructure and organisational changes within SNS Bank NV, placed pressure on the available qualitative attention for the internal control framework. Specifically with respect to the linkage between internal control at group and business unit level. The internal control framework currently consists of individual components for managing actual risks, whose overall effectiveness is then tested. In the new governance structure, the management team of the bank will give further substance to an integrated control framework.
14.4.2 Control over financial reporting
The financial reporting management and control systems are an integral part of SNS Bank NV’s overall risk management and control systems. Key elements in respect of the control over its financial reporting are:
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The Financial Committee (SNS REAAL), which is responsible for setting policy frameworks as well as the organisation of financial and actuarial administrations and processes.•
The business units and staff departments that are responsible for the execution of tasks, and thus for an accurate and faithful recording of the transactions and the reporting thereon.•
A system of financial key controls within the financial accounting and reporting departments in order to monitor the proper operation of financial reporting management and control systems.•
The Financial Committee’s (SNS REAAL) assessment of the financial reporting, partly based on the results from the key controls. The findings of the financial reporting process, together with the financial reporting, are discussed in the Audit Committee after approval by the Executive Board of SNS REAAL.We believe that the measures taken lead to an adequate control over the financial reporting process.
14.4.3 Transparency statement
The members of the Management Board state the following: “SNS Bank NV prepares the consolidated and company financial statements 2013 of SNS Bank NV in accordance with International Financial Reporting Standards (IFRS), as adopted within the European Union (EU) and with Title 9 Book 2 of the Dutch Civil Code and, to the best of our
knowledge, they give a true and fair view of the assets, liabilities, size and composition of equity, financial position as per 31 December 2013 and the financial result of the Group and its consolidated companies. The annual report gives, to the best of our knowledge, a true and fair view of the position as per the balance sheet date and the development and performance of the business during the financial year. The principal risks SNS Bank NV faces are described in the Annual Report.”
Utrecht, 26 March 2014 Dick Okhuijsen, Chairman Wim Henk Steenpoorte Maurice Oostendorp