ING Direct 2004 Annual Report Download - page 40

The new management structure, the strategic renewal and
corporate governance were the dominant issues in the
meetings of the Supervisory Board with the Executive Board
in 2004. Every quarter the financial results were discussed.
The Supervisory Board looks back on a year in which the
renewed Executive Board focused on portfolio management
and execution, thus laying the foundations for sustainable
growth and profit.
General
In 2004 the Supervisory Board and its Committees – the Audit
Committee, the Remuneration and Nomination Committee
and the Corporate Governance Committee – met regularly.
Certain issues were the subject of intensive discussion.
Attendance levels were high, with Supervisory Board members
only occasionally unable to be present.
An introduction programme was organised for Mr. Eric
Bourdais de Charbonnière, the Supervisory Board member
who was appointed with effect from 28 April 2004.
In view of the wider and more demanding range of tasks
of the Audit Committee, the Supervisory Board decided to
raise the cost allowance for this Committee from EUR 450
to EUR 1,500 per meeting. The cost allowance for the other
Committees is EUR 450 per attended meeting. In addition,
each committee member receives a fixed annual remuneration
of EUR 1,360, apart from the compensation as a Supervisory
Board member. The composition of the Supervisory Board and
its Committees is stated on page 2 of this annual report.
Supervisory Board
The Supervisory Board met eight times in 2004, of which seven
times in the presence of the Executive Board. Four meetings
with the Executive Board centred on financial performance,
two meetings were mainly dedicated to strategy and one
meeting focused on exiting the individual life reinsurance
business in the United States. Other major topics of discussion
at the various meetings were management development,
corporate governance, the remuneration policy of the
Executive Board, the policy in relation to the communication
of profit expectations and the progress of the projected
divestments. The growth of ING Direct and the development
of Nationale-Nederlanden were also on the agenda.
The discussions in the Supervisory Board on the result
development were attended by the general managers of
Corporate Control & Finance, the Group Actuary, the internal
auditor and the external auditors.
The internal meeting without the Executive Board was
devoted to the Supervisory Board’s own performance as well
as that of the Executive Board and its individual members.
The future composition of the Supervisory Board was also
discussed. It was decided to add the age limit of 70 years to
the Supervisory Board charter in order to ensure a structured
renewal of the Supervisory Board. It means that a Supervisory
Board member will retire from the Board after serving three
terms of four years or at the General Meeting of Shareholders
in the year he or she turns 70, whichever comes first.
Several meetings included presentations by business units.
These served a dual purpose, namely to keep the board
members informed of evolving developments within the
markets in which ING is active and to make acquaintances
with the management of business units.
The May meeting was combined with a visit to Shanghai for
a first-hand introduction to the Chinese market. Regional
management provided insight into the prospects for ING in
the coming years in Asia.
Audit Committee
The Audit Committee met six times: four times about the
development of the results, and twice about the annual figures
and the half-yearly figures according to the US accounting
principles. The meetings also addressed such topics as
accounting principles, risk management, administrative
organisation, internal controls and internal and external
audits. Furthermore, tax and legal affairs got attention,
including quarterly reporting on complaints received under
the Whistleblower procedure. The introduction of the
International Financial Reporting Standards received extensive
attention. ING is set to launch IFRS-compliant reporting with
effect from 2005. The progress made towards reporting on the
administrative organisation in conformity with the US
Sarbanes-Oxley Act (SOX-404 requirements) was specifically
discussed. Various business units held presentations to provide
the Audit Committee with more insight into current
developments from its own perspective. One of these subjects
was information technology security. An updated version of
the Audit Committee charter was discussed and approved.
The Audit Committee meetings were attended by the chairman
and vice-chairman/CFO of the Executive Board as well as the
general managers of Corporate Control & Finance, the Group
Actuary, the General Counsel, the internal auditor and the
external auditors. Every meeting ended with a closed meeting
of the Audit Committee with the internal and external auditors
to ensure that all relevant issues were discussed.
The independence of the external auditors was discussed and
confirmed. The Audit Committee advised positively about the
appointment of a new lead partner for KPMG, the external
auditor of ING Bank. Brendan Nelson will succeed Leo
Graafsma as of 27 April 2005.
Remuneration and Nomination Committee
The Remuneration and Nomination Committee met three
times. The main subjects were the future composition of the
Executive Board and Supervisory Board and the available
management potential below the Executive Board. The
remuneration structure of the Executive Board and the
implications of the Dutch Corporate Governance Code for e.g.
the contracts for members of the Executive Board were
discussed at the start of 2004. The contracts for the Executive
Board members being newly appointed were tabled and
approved. The meetings were also attended by the chairman
and vice-chairman of the Executive Board.
REPORT OF THE SUPERVISORY BOARD1.3
MANAGEMENT
AND GOVERNANCE
38 ING Group Annual Report 2004