ING Direct 2009 Annual Report Download - page 58

Corporate governance
RECENT DEVELOPMENTS
LEGISLATIVE AND REGULATORY DEVELOPMENTS
In December 2008, the Monitoring Committee of the Dutch
Corporate Governance Code (‘Frijns Committee’) published
an updated version of the Dutch Corporate Governance Code
(‘Corporate Governance Code’). The Corporate Governance Code
became effective on 1 January 2009. Dutch listed companies are
required to report, on the basis of “apply or explain” on their
application of the principles and best-practice provisions of the
Corporate Governance Code for the first time in their annual
report for the financial year 2009.
On 9 September 2009 the Dutch Banking Association adopted the
Banking Code (Code Banken), which became effective on 1 January
2010. As from the 2010 financial year ING Bank N.V. will report on
the implementation of the Banking Code. On the application of the
principles regarding remuneration, the Annual Report of ING Group
will report as from the 2010 financial year.
In addition, several legislative proposals are under discussion in
the Lower House of the Dutch Parliament or were adopted by it
in 2009. If enacted, these legislative proposals may affect
ING Group.
TRANSACTIONS WITH THE DUTCH STATE
On 12 November 2008, ING Group issued 1 billion core Tier 1
securities (‘Securities’) to the Dutch State against payment of
EUR 10 per Security resulting in an increase of ING Group’s core
Tier 1 capital of EUR 10 billion. The Securities do not form part
of ING Group’s share capital; accordingly they do not carry voting
rights in the general meeting. The financial entitlements of the
Securities are described in the Annual Accounts on page 90.
On 26 January 2009, ING Group reached an agreement with the
Dutch State regarding the IABF, as further described on page 11.
During 2009, ING Bank N.V. issued various series of debt
instruments under the 2008 Credit Guarantee Scheme of the Dutch
State (‘Bonds’), for the first time on 30 January 2009.
As part of these transactions, certain arrangements with respect
to corporate governance and executive remuneration were agreed
with the Dutch State which will remain in place as long as the
Dutch State owns at least 250 million Securities, as long as the
IABF continues or any of the Bonds is outstanding (whichever
expires last).
These arrangements entail that:
the Dutch State may recommend two candidates (‘State •
Nominees’) for appointment to the Supervisory Board. Certain
decisions of the Supervisory Board require approval of the State
Nominees (these decisions are specified in the section on the
Supervisory Board on page 63);
ING Group will develop a sustainable remuneration policy for •
the Executive Board and Senior Management that is aligned to
new international standards and submit this to its General
Meeting for adoption. This remuneration policy shall include
incentive schemes which are linked to long-term value creation,
thereby taking account of risk and restricting the potential for
‘rewards for failure’. The new remuneration policy will include
objectives relating to corporate and social responsibility;
This section discusses the application by ING Groep N.V. (‘ING
Group’) of the Dutch Corporate Governance Code and provides
information on the share capital and control, the Executive Board,
the Supervisory Board and the external auditor. This section,
including the parts of this Annual Report incorporated by reference,
also serves as the ‘corporate governance statement’ referred to in
section 2a of the Decree with respect to the contents of the annual
report (Besluit tot vaststelling van nadere voorschriften omtrent
de inhoud van het jaarverslag) (1).
(1) Dutch Bulletin of Acts (Staatsblad) 2009, 154.
1.3 Our governance
ING Group Annual Report 2009
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