ING Direct 2011 Annual Report Download - page 70

The Dutch State recommended Lodewijk de Waal and Tineke
Bahlmann for appointment to the Supervisory Board, who were
both appointed by the General Meeting on 27 April 2009.
FUNCTION OF THE SUPERVISORY BOARD
The function of the Supervisory Board is to supervise the policy of
the Executive Board and the general course of events of ING Group
and its business, as well as to provide advice to the Executive Board.
In line with Dutch company law, the Corporate Governance Code
and the Articles of Association, the Supervisory Board Charter
requires all members of the Supervisory Board, including the State
Nominees, to act in accordance with the interests of ING Group
and the business connected with it, taking into account the relevant
interests of all the stakeholders of ING Group, to perform their
duties without mandate and independent of any interest in the
business of ING Group, and to refrain from supporting one interest
without regard to the other interests involved.
Certain resolutions of the Executive Board, specified in the Articles
of Association of ING Group, the Executive Board Charter and in
the Supervisory Board Charter, are subject to the approval of the
Supervisory Board.
Pursuant to the agreements concerning the transactions with the
Dutch State mentioned above, certain resolutions of the
Supervisory Board are subject to the condition that no State
Nominee voted against the proposal. These rights became effective
as from the 2009 annual General Meeting. These resolutions relate
to the following matters:
a. the issue or acquisition of its own shares by ING Group, other
than related to the Securities issue (including, for the avoidance
of doubt, for the purpose of conversion or financing of a
repurchase of Securities), as part of regular hedging operations
or in connection with employment schemes;
b. the cooperation by ING Group in the issue of depositary receipts
for shares;
c. the application for listing on or removal from the price list of any
stock exchange of the securities referred to in a. or b.;
d. the entry into or termination of lasting cooperation between
ING Group or a dependent company and another legal entity or
partnership or as general partner in a limited partnership or
general partnership where such cooperation or termination
thereof has material significance for ING Group, i.e. amounting
to one-quarter or more of ING Group’s issued capital and
reserves as disclosed in its balance sheet and notes thereto;
e. the acquisition by ING Group or a dependent company of a
participating interest in the capital of another company
amounting to one-quarter or more of ING Group’s issued capital
and reserves as disclosed in its balance sheet and notes thereto
or a material increase or decrease in the magnitude of such a
participating interest;
f. investments involving an amount equal to one-quarter or more
of ING Group’s issued capital and reserves as disclosed in its
balance sheet and notes thereto;
g. a proposal to wind up ING Group;
h. filing of a petition for bankruptcy or moratorium of ING Group;
i. a proposal to reduce the issued capital of ING Group (other than
related to the Securities issue);
j. a proposal for merger, split-off or dissolution of ING Group;
k. a proposal to change ING Group’s remuneration policy; and
l. appointment of the chief executive officer of the Executive Board.
SUPERVISORY BOARD
APPOINTMENT AND DISMISSAL
Members of the Supervisory Board are appointed by the General
Meeting from a binding list to be drawn up by the Supervisory
Board. The list will be rendered non-binding if a resolution of the
General Meeting to that effect is adopted by an absolute majority of
the votes cast, which majority represents more than one-third of the
issued share capital. Candidates for appointment to the Supervisory
Board must comply with the expertise and reliability requirements
set out in the Dutch Financial Supervision Act. Pursuant to current
Dutch law, this list is to contain at least two candidates for each
vacancy, and if not, the list will be non-binding. With respect to the
second candidate, ING Group’s policy is to propose (retired) senior
managers or other high-ranking officers who, in view of the
forthcoming abolition of this requirement, do not have to meet the
independency requirements of the Corporate Governance Code or
the requirements of the Supervisory Board Profile.
Members of the Supervisory Board may be suspended or dismissed
at any time by a majority resolution of the General Meeting. A
resolution to suspend or dismiss members of the Supervisory Board
that has not been brought forward by the Supervisory Board may
only be adopted by the General Meeting by an absolute majority of
the votes cast, which majority represents more than one-third of
the issued share capital.
In connection with the issue of the Securities to the Dutch State,
ING Group and the Dutch State agreed that the Dutch State may
recommend candidates for appointment to the Supervisory Board
in such a way that upon appointment of all recommended
candidates by the General Meeting, the Supervisory Board would
comprise two State Nominees among its members. The Dutch State
may recommend a Supervisory Board member already in office.
The recommendation right of the Dutch State is subject to
applicable law and to corporate governance practices, generally
accepted under stock exchange listing regimes applicable to ING
Group and continues as long as the Dutch State holds at least 250
million Securities, or as long as the IABF continues (whichever
occurs last). Should the holding of the Dutch State decrease below
250 million Securities and the IABF have expired, the State
Nominees will remain in office and complete their term of
appointment.
Candidates recommended by the Dutch State will be nominated for
appointment by way of a binding nomination, unless one or more
specified situations occur. These include that:
• the candidate is not fit and proper to discharge his duties as a
Supervisory Board member;
• upon appointment the composition of the Supervisory Board
would not be appropriate and/or not be in accordance with the
Supervisory Board Profile;
• appointment would be incompatible with any provision of the
Articles of Association, the Supervisory Board Charter, any
principle or best-practice provision of the Corporate Governance
Code as applied by ING Group and/or any other generally
accepted corporate governance practice or requirement which is
applicable to ING Group as an internationally listed company;
• the relevant candidate has a structural conflict of interest with
ING Group; and
• the Dutch central bank refuses to issue a statement of ‘no
objection’ for the appointment of the relevant candidate.
68 ING Group Annual Report 2011
Corporate governance continued