ING Direct 2008 Annual Report Download - page 68

ING Group Annual Report 2008
1.3 Our Governance
66
FINANCIAL REPORTING
A description of the main features of ING Group’s internal control
and risk management systems in relation to the financial reporting
process is included in the statement with respect to Section 404
Sarbanes-Oxley Act on page 71, which is deemed to be included
by reference here.
CHANGE OF CONTROL PROVISIONS
Legal provisions
Under the terms of the Dutch Act on Financial Supervision a
declaration of no objection from the Dutch Minister of Finance
must be obtained by anyone wishing to obtain or hold a
participating interest of at least 10% respectively in ING Group or
to exercise control to this extent via a participating interest in ING
Group. Similarly, on the basis of indirect change of control statutes
in the various jurisdictions where subsidiaries of ING Group are
operating, permission from or notification to local regulatory
authorities may be required for the acquisition of a substantial
interest in ING Group.
Change of control clauses in important contracts
ING Group is not a party to any material agreement, which
becomes effective, or is being amended or terminated subject
to the condition of a change of control of ING Group following
a public bid defined in section 5:70 of the Financial Supervision
Act. ING Group subsidiaries have customary change of control
arrangements in contracts related to various business activities,
such contracts including joint venture agreements, letters of
credit and other credit facilities, reinsurance contracts and futures
and option trading contracts. Following a change of control
of ING Group (whether or not as the result of a public bid), such
contracts may be amended or terminated, leading to, for example,
an obligatory transfer of the interest in the joint venture, early
repayment of amounts due, loss of credit facilities or reinsurance
cover and liquidation of outstanding futures and option
trading positions.
Severance payments to Executive Board members
The employment contracts with the members of the Executive
Board provide for severance payments, which are to become due
in case of termination of the contract in connection with a public
bid defined in section 5:70 of the Dutch Financial Supervision
Act. With respect to the amounts due, there is no difference as
to whether termination of the contract would be in connection
with a public bid or not.
AMENDMENT OF THE ARTICLES OF ASSOCIATION
The Articles of Association of ING Group may be amended in
accordance with a resolution of the General Meeting, adopted
with a majority of two-thirds of the votes cast in a meeting in
which two-thirds of the issued share capital is present or
represented. The resolution of the General Meeting must be
proposed by the Executive Board; the Executive Board proposal
must be approved by the Supervisory Board.
EXTERNAL AUDITORS
At the annual General Meeting on 22 April 2008, Ernst & Young
was appointed to audit the financial statements of ING Group
for the financial years 2008 to 2011 inclusive, to report on
the outcome of these audits to the Executive Board and the
Supervisory Board and to provide an audit opinion on the financial
statements of ING Group. Furthermore, Ernst & Young also audited
and reported on the effectiveness of internal control over financial
reporting on 31 December 2008.
The external auditors attended the meetings of the Audit
Committee and the General Meeting held in 2008.
After a maximum period of five years of performing the financial
audit of ING Group or ING Verzekeringen N.V. or ING Bank N.V.,
the lead audit partners of the external audit firm and the audit
partners responsible for reviewing the audits, have to be replaced
by other partners of the external audit firm. The Audit Committee
provides recommendations to the Supervisory Board regarding
these replacements based on an annual evaluation of the
provided services. In line with this requirement, the lead audit
partner of Ernst & Young was replaced after the year-end audit
2006. The rotation of other partners involved with the audit of
the financial statements of ING are subject to applicable
independence legislation.
The external auditors may be questioned at the annual General
Meeting about their audit opinion on the annual accounts. The
external auditors will therefore attend and be entitled to address
the meeting.
Ernst & Young may only provide audit and non-audit services to
ING Group and its subsidiaries with the permission of the Audit
Committee. The Audit Committee has generally pre-approved
certain types of audit, audit-related, tax and non-audit services to
be provided by ING Group’s external audit firms on an annual
basis. Services that have not been generally pre-approved by the
Audit Committee should not be provided by the external auditor
or should be specifically pre-approved by the Audit Committee
after recommendation of local management.
The Audit Committee also sets the maximum annual amount
that may be spent for pre-approved services. Throughout the year
the external audit firms and ING monitor the amounts paid versus
the pre-approved amounts. The external auditor provides the
Audit Committee with a full overview of all services provided to
ING, including related fees, supported by sufficiently detailed
information. This overview is periodically evaluated by the Audit
Committee during the year.
More details of ING Group’s policy on external auditor’s
independence are available on the website of ING Group
(www.ing.com).
Corporate governance (continued)