ING Direct 2009 Annual Report Download - page 55

During the internal meetings of the Supervisory Board (Supervisory
Board meetings with the CEO present) the stepping down of
Michel Tilmant as CEO, the succession of the CEO position by
Jan Hommen as well as the succession of the CFO position were
discussed. Patrick Flynn was nominated as a CFO candidate for
appointment in the 2009 annual General Meeting. The peer
group selection for assessing Executive Board remuneration and
the performance assessments of the individual Executive Board
members were reviewed in February. In its internal meeting in May
the Supervisory Board appointed Jan Hommen as chairman of the
Executive Board and Peter Elverding as chairman of the Supervisory
Board. In addition to the Supervisory Board members nominated
by the Dutch State, other potential Supervisory Board candidates
and the membership of the various Supervisory Board committees
were discussed. A new governance structure for ING was approved,
including a Management Board Banking and a Management Board
Insurance, both reporting to the Executive Board. The Supervisory
Board was regularly updated by the Remuneration Committee on
the development of the new Remuneration policy for the Executive
Board and senior management. The Supervisory Board appointed
Jeroen van der Veer as vice-chairman of the Supervisory Board as
of 1 October 2009. At the internal meeting of the Supervisory
Board in November, the functioning of the Supervisory Board, its
committees and its individual members and the conclusions to be
drawn from it were discussed. This was carried out in the light of
the Supervisory Board Profile, the size and composition of the
Supervisory Board. Furthermore, the functioning of the Executive
Board and the performance of the individual Executive Board
members were discussed.
AUDIT COMMITTEE MEETINGS
In 2009, the Audit Committee met five times to discuss the annual
and the quarterly results. In two additional meetings at the
beginning of the year conclusions were drawn from the assessment
of the effects of the financial crisis on ING and follow-up actions
were discussed, among which were the strengthening of the risk
governance structure, adjustment of the risk scenarios and
establishing a separate Supervisory Board Risk Committee. The
Audit Committee was frequently updated on the effect of the
derisking measures. Other topics discussed in the meetings were
risk, governance, capital management and regulatory matters and,
more specifically, the financial position of the ING pension fund and
the capital position of ING Insurance US as well as the derisking of
the variable annuity products.
RISK COMMITTEE MEETINGS
A Supervisory Board Risk Committee started in August. Two
meetings were held in 2009 with all members present. Group risk,
financial risk and non-financial risk, previously discussed in the
Audit Committee, are now discussed in separate Risk Committee
meetings. The adjusted risk appetite statements for the ING
banking business as well as the insurance business were specifically
discussed in the Risk Committee meetings.
NOMINATION COMMITTEE MEETINGS
In 2009, a separate Nomination Committee started and met
three times. The Nomination Committee discussed the future
composition of the Supervisory Board and its committees as
The 2008 annual figures were discussed in February, including
the related reports from internal and external auditors and
the assessment of the Executive Board of the adequacy and
effectiveness of ING’s risk management and control systems as
well as the significant changes made. The effect of the financial
crisis was evident in the fourth quarter of 2008 and resulted in
a first time negative result in the fourth quarter of 2008 as well
as a loss for the full year 2008. The draft agenda of the annual
General Meeting was discussed and approved.
The successive quarterly figures of 2009 were discussed in May,
August and November respectively. The 2009 annual General
Meeting was evaluated in May and in August the capital position
of ING Insurance US was discussed. The strategy of Insurance
Netherlands was presented in September. In September, the new
Supervisory Board members followed an extensive induction course
giving insight in the ING strategy, the six business lines as well as
the activities of the Group staff departments in relation to the
Supervisory Board responsibilities.
The Supervisory Board also met to discuss and approve the Back to
Basic strategy to transform ING into a predominantly European
bank as well as a global insurer in life and retirement services,
including a global investment manager, with an increased focus on
customers. The strategy also focused on cost savings and various
deleveraging activities. The Back to Basics strategy was externally
communicated on 9 April 2009.
In the second half of 2009 the Supervisory Board continued to
discuss the strategy of ING, taking into account the discussions with
the European Commission (EC) on the Restructuring Plan for ING.
As a logical next step in the Back to Basics strategy, the Supervisory
Board agreed to move towards a complete separation of the
banking and insurance operations over the next four years through
a divestment of all insurance operations (including the investment
management activities).
Following the decision to split the Company, the Supervisory Board
approved the ING Restructuring Plan that was negotiated with the
EC, under the assumption that the level playing field in the EU
internal market and equal treatment of all state-supported financial
institutions would be safeguarded by the EC. The Supervisory
Board also approved an adjustment of the terms of the core
Tier 1 securities agreement with the Dutch State to facilitate an
earlier repayment of EUR 5 billion. The proposal to organise an
extraordinary General Meeting, held on 25 November 2009 in
order to get approval for the strategic decision to split the Company
and to raise EUR 7.5 billion of capital through a rights issue to
facilitate the earlier repayment and the additional fee to the
Dutch State, was also approved.
In October several formal decisions regarding the extraordinary
General Meeting in November were taken and the agenda for the
meeting in November was approved. The annual update of the ING
Regulation on Financial Instruments was approved in the November
meeting. Due to the economic crisis and the cost containment
programme, the Supervisory Board did not visit any ING operations
abroad in 2009.
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