ING Direct 2002 Annual Report Download - page 22

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Annual Report 2002 · ING Group 19
Report of the Supervisory Board
Audit Committee meetings
The Audit Committee met five times in 2002. In
January, a meeting was held to discuss the
developments in international regulations with
regard to accounting principles, especially the
implementation of the European IAS regulations
as per 2005 in the light of the existing ING
accounting principles and the American
accounting principles (US GAAP). The develop-
ments in regulations regarding risk manage-
ment were also discussed.
The general management of ING Bank
Netherlands and Nationale-Nederlanden informed
the Audit Committee about the back-office
developments at their business units. In February
and August respectively, the 2001 annual results
and the results for the first six months of 2002
were discussed, as well as the reports of the
internal auditor about the quality of the
accounting and reporting procedures. The main
issues of the meetings in October and November
were the measures that needed to be taken to
strengthen the capital base, which had
deteriorated as a result of the malaise on the
share markets.
Updating the Audit Committee charter
was an important point of discussion, also in
view of the new regulations in the United States
with regard to the role of the Audit Committee.
Guaranteeing the independence of the external
auditor and the relevant regulations were also
items on the agenda.
Remuneration and Nomination
Committee meetings
The Remuneration and Nomination Committee
met twice. The remuneration system of Executive
Board members was discussed, especially in
connection with the management levels below
the Executive Board. In the light of international
developments, the ratio between fixed and
variable remuneration was reviewed as well as
the parameters that determine the variable part
of the remuneration. This took place with the
help of external expertise and on the basis of
various benchmarks. The outcome was that both
the remuneration system and the level of
remuneration need to be adjusted. The way in
which the remuneration of the Executive Board
and the Supervisory Board is disclosed was also
discussed.
In the field of management development,
the potential of talented managers who will in
time qualify for the highest management levels
was discussed as well as the way in which future
vacancies in the Executive Board, the Super-
visory Board and its committees will be filled.
Two committee members talked to all
individual members of the Executive Board
about its functioning after which an evaluation
took place with the entire Executive Board and
subsequently with the Supervisory Board. These
evaluations take place annually with the
intention to optimise the functioning of the
Executive Board.
Corporate governance
In view of the international developments in the
field of corporate governance and the increasing
complexity of managing an international
company such as ING, the Supervisory Board
discussed the issue of corporate governance
during several meetings, especially with regard
to the influence of shareholders and holders
of depositary receipts and the role of the
Supervisory Board and its committees.
Regarding the structure of ING, it was
decided to establish two Dutch holdings, one for
the banking operations and one for the insurance
operations. Both will have an Executive Board
(the ING Management for the Netherlands) and
a Supervisory Board, each with the same
members. Regarding ING Group, it is proposed to
abandon the voluntary ‘large company regime’,
as a result of which the General Meeting of
Shareholders will have more direct influence.
This implies that members of the Executive
Board and the Supervisory Board are appointed
 
Supervisory Board met
seven times, Audit
Committee five times
—
Strategy and results
discussed in detail
—
Remuneration and
Nomination Committee
discussed future
compensation structure for
top management levels
—
Decisions taken on
modernisation of corporate
governance, resulting in
proposals to Shareholders’
meeting