ING Direct 2008 Annual Report Download - page 59

ING Group Annual Report 2008
57
Supervisory Board may still decide to consider such member
to be independent in order to take into account specific
circumstances, such as family and employment relations, so as to
allow for situations of non-independence that are not material;
best-practice provisions III.2.2 and II.3.1: the legally required •
second candidate on a binding nomination for appointment to
the Supervisory Board does not need to meet the independence
criteria of the Tabaksblat Code nor the requirements of the
Supervisory Board profile, in view of the contemplated abolition
of this legal requirement;
best-practice provision III.3.4: Jan Hommen, who was appointed •
in the 2005 annual General Meeting as a Supervisory Board
member, has more than five positions as a supervisory board
member with other Dutch-listed companies. This was approved
by the Supervisory Board in view of Jan Hommen’s intention to
give up his chairmanship of the Supervisory Board of TNT N.V.
With a view to his proposed appointment to the Executive Board
at the 2009 General Meeting, Jan Hommen will step down from
his positions as a Supervisory Board member of Reed
Elsevier N.V. and TNT N.V. by April 2009. He will also step down
from his position as a Supervisory Board member of Koninklijke
FrieslandCampina N.V. (non-listed);
best-practice provision III.3.5: under special circumstances the •
Supervisory Board may deviate from the general rule that a
member of the Supervisory Board may not be reappointed for
more than two subsequent four-year terms;
best-practice provision III.5.1: instead of a separate remuneration •
committee and a nomination committee, ING Group established
a combined Remuneration and Nomination Committee; this
committee however, was separated into a Nomination
Committee and a Remuneration Committee on 1 January 2009;
best-practice provision III.5.11: the Remuneration and •
Nomination Committee was chaired by the chairman of the
Supervisory Board. On 1 January 2009, the new separate
Remuneration Committee will no longer be chaired by the
chairman of the Supervisory Board;
best-practice provision III.6.1: in the case of a transaction with •
a family member that entails a conflict of interests according to
the Code, the Supervisory Board may decide that no conflict
of interests exists if the relationship is based on a marriage that
is now over, to allow for situations where the family relationship
no longer exists;
best-practice provisions III.6.3 and III.6.4: transactions with •
Supervisory Board members or persons holding at least 10% of
the shares of ING Group in which there are significant conflicting
interests will be published in the Annual Report, unless (i) this
conflicts with the law, (ii) the confidential, share-price sensitive
or competition-sensitive character of the transaction prevents
this and/or (iii) the information is so competition-sensitive that
the publication could damage the competitive position of
ING Group;
best-practice provision III.7.4: Supervisory Board members •
may obtain banking and insurance services from ING Group
subsidiaries in the ordinary course of their business and on terms
that are customary in the sector. These may include services in
which the granting of credit is of a subordinate nature, e.g.
credit cards and overdrafts in current accounts. These exceptions
are based on a lack of materiality;
best-practice provision IV.3.8: if a notarial report is drawn up of •
the General Meeting, shareholders will not have the opportunity
to react to the minutes of the meeting, as this would be in
conflict with the laws applicable to such notarial report.
Deviations from the Tabaksblat Code by the Trust Office are
reported in the Trust Office’s own report (see page 67).
Differences between Dutch and US corporate
governance practices
In conformity with recent regulation from the US Securities and
Exchange Commission, ING Group as a foreign private issuer,
whose securities are listed on the New York Stock Exchange
(‘NYSE’) must disclose in its Annual Report on Form 20-F any
significant ways in which its corporate governance practices differ
from those applicable to US domestic companies under the NYSE
listing standards.
ING Group believes the following to be the significant differences
between its corporate governance practices and NYSE corporate
governance rules applicable to US companies:
ING Group has a two-tier board structure, in contrast to the •
one-tier board structure used by most US companies. In the
Netherlands, a Naamloze Vennootschap (public limited liability
company) has an Executive Board as its management body and
a Supervisory Board which advises and supervises the Executive
Board. In general, Executive Board members are employees of
the company while members of the Supervisory Board are often
former state or business leaders and sometimes former members
of the Executive Board. Members of the Executive Board and
other officers and employees cannot simultaneously be a
member of the Supervisory Board. The Supervisory Board must
approve specified decisions of the Executive Board. Under the
Tabaksblat Code, all members of the Supervisory Board with the
exception of not more than one person, must be independent.
The present members of ING Group’s Supervisory Board
with the exception of one member, are independent within
the meaning of the Tabaksblat Code. The definitions of
independence under the Tabaksblat Code, however, differ in
their details from the definitions of independence under the
NYSE listing standards. In some cases the Dutch requirements
are stricter and in other cases the NYSE listing standards are the
stricter of the two. The Audit Committee, Corporate Governance
Committee and Remuneration and Nomination Committee of
ING Group are comprised of members of the Supervisory Board.
In contrast to the Sarbanes-Oxley Act of 2002, the Tabaksblat •
Code contains an ‘apply-or-explain’ principle, offering the
possibility to deviate from the Code as long as any such
deviations are explained. To the extent that such deviations
are approved by the general meeting, the company is deemed
to be in full compliance with the Code.
Dutch law requires that the company’s external auditors •
be appointed at the general meeting and not by the
Audit Committee.
The ING Group’s Articles of Association provide that there are •
no quorum requirements to hold a General Meeting, although
certain shareholder actions and certain resolutions may require
a quorum.
The shareholder approval requirements for equity compensation •
plans under Dutch law and the Tabaksblat Code differ from
those applicable to US companies which are subject to the
NYSE’s listing standards. Under Dutch company law and the
Tabaksblat Code, shareholder approval is only required for equity
compensation plans (or changes thereto) for members of the
Executive Board and Supervisory Board, and not for equity
compensation plans for other groups of employees.