ING Direct 2009 Annual Report Download - page 60

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 public limited liability company (naamloze
vennootschap) has an Executive Board as its management body
and a Supervisory Board which advises and supervises the
Executive Board. In general, members of the Executive Board 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 Corporate Governance 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
Corporate Governance Code. The definitions of independence
under the Corporate Governance 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, Risk Committee,
Remuneration Committee, Nomination Committee and
Corporate Governance Committee of ING Group are
comprised of members of the Supervisory Board.
In contrast to the Sarbanes-Oxley Act of 2002, the Corporate •
Governance Code contains an ‘apply-or-explain’ principle,
offering the possibility to deviate from the Corporate
Governance 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 Corporate Governance Code.
Dutch law requires that the company’s external auditors •
be appointed at the general meeting and not by the
Audit Committee.
The articles of association of ING Group (‘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 Corporate Governance Code
differ from those applicable to US companies which are subject
to the NYSE’s listing rules. Under Dutch company law and the
Corporate Governance 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.
consistency in ING Group’s decision making, within the current
legal framework, the depositary-receipt structure, in the opinion of
the Executive Board and the Supervisory Board, is still the most
appropriate means to achieve this.
In view of the foregoing, the Executive Board and the Supervisory
Board are of the opinion that abolishing the depositary-receipt
structure cannot be justified at this moment. There will be a natural
moment to evaluate ING Group’s governance in its entirety as soon
as the current restructuring and the forthcoming divestments are
completed. The depositary-receipt structure will form part of that
evaluation.
RISK COMMITTEE, REMUNERATION COMMITTEE
AND NOMINATION COMMITTEE
On 1 January 2009, the Remuneration and Nomination Committee
of the Supervisory Board was split into a separate Remuneration
Committee and Nomination Committee. As recommended in
section III.5.11 of the Corporate Governance Code, the
Remuneration Committee will not be chaired by the chairman
of the Supervisory Board. On 1 June 2009, a separate Risk
Committee was set up.
CORPORATE GOVERNANCE CODES
COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE
For its corporate governance structure and practices, ING Group
uses the Corporate Governance Code as reference. During 2009
ING Group considered the Corporate Governance Code and to
what extent it could be implemented. ING Group’s implementation
of the Corporate Governance Code will be submitted for approval
at the 2010 General Meeting. The Corporate Governance
Code can be downloaded from the website of the Monitoring
Commission Dutch Corporate Governance Code (www.
commissiecorporategovernance.nl/Corporate_Governance_Code).
Any deviations from the Corporate Governance Code which are
to be reported for 2009 are addressed in this section. However,
deviations from the Corporate Governance Code with respect to
the remuneration of the Executive Board and the Supervisory Board
are addressed in the Remuneration report (see page 76) whereas
any deviations from the Corporate Governance Code by ING Trust
Office are reported in ING Trust Office’s own report (see page 69).
ING Group also considers the principles of the Banking Code with
respect to remuneration as a reference and will, in accordance
with the Banking Code, report on their application as of the
financial year 2010. The remaining principles of the Banking Code
are not considered as a reference for ING Group’s own corporate
governance, although the application thereof by ING Group’s
banking subsidiaries will be reflected to a certain extent in ING
Group’s own corporate governance structure and corporate
governance practices.
DIFFERENCES BETWEEN DUTCH AND US CORPORATE
GOVERNANCE PRACTICES
In conformity with 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 differences
between its corporate governance practices and those applicable
to US domestic companies under the NYSE listing standards.
Corporate governance (continued)
1.3 Our governance
ING Group Annual Report 2009
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