ING Direct 2011 Annual Report Download - page 61

1 Who we are 2 Report of the Executive Board 3 Corporate governance 4 Consolidated annual accounts 5 Parent company annual accounts 6 Other information 7 Additional information
new candidates for the Supervisory Board in November and
approved the remuneration framework for ING Group as well as
the format for the 2011 Supervisory Board self assessment. An
external consultant advised on the self-assessment procedure and
drafted the various questionnaires as well as the report based on
the outcome of the questionnaires. The assessment of the
Supervisory Board, its committees and its members was conducted
in December 2011 through questionnaires and bilateral meetings
between the chairman and each Supervisory Board member. The
self assessment resulted in action points concerning the meeting
documents, the structure and organisation of the meetings,
contacts with senior management and HR topics.
Audit Committee meetings
In 2011 the Audit Committee met five times, with one absentee
once, to discuss the annual and quarterly results, the annual US
GAAP results and the reports from the external auditor.
Theexposureson the Southern European countries, and more
specifically the restructuring and impairment of Greek government
bonds,were a topic of frequent debate during the year. Cost
development within ING, as well as management actions
concerned, were discussed several times during the year.
Next to financial reporting, the Audit Committee also
discussedtopics such as internal controlsover financial
reporting,the implementation of a new payments control
framework for commercial payments, capital management
and regulatory matters.
In November, a proposal for evaluation of the performance of the
external auditor Ernst & Young was discussed. The results of this
evaluation were discussed in the February 2012 Audit Committee
meeting.
Directly following the Audit Committee meetings, the members
of the Audit Committee met with the internal and external auditors
to confirm that all relevant topics were discussed in the Audit
Committee meeting.
Risk Committee meetings
The Risk Committee met four times in 2011, with twice one
absentee. In each Risk Committee meeting the financial risk reports
for Bank, Insurance and Group and the non-financial risk reports
for banking and insurance were discussed. The risk appetite
statements for 2011 were discussed and approved in February.
Management reported on the outcome of stress tests for banking
and insurance and updated on the implementation of Solvency II
regulation within Insurance. The effect of the non-financial risk
mitigating measures became visible during the year. The exposure
on the Southern European countries and the possible risks for ING
as a result of the sovereign debt crisis in the eurozone were closely
monitored by the Risk Committee. Each meeting ended with a
general discussion on possible future risks.
Nomination Committee meetings
The Nomination Committee met four times in 2011, with one
absentee once, to discuss the future composition of the Supervisory
Board as well as the succession planning of the Executive Board and
the Management Boards. The Nomination Committee discussed
various appointments in the Management Boards Banking and
Insurance as well as the nomination of a candidate for the Executive
preparation for the IPOs and the divestment intentions. The
Supervisory Board approved the amended Group decision structure
in which the empowerment of the boards of Insurance EurAsia and
Insurance US was reflected. A presentation was given on the
developments within ING Real Estate in the second half of 2010
and the expected developments for the first half of 2011.
In June, the key timelines for the Insurance EurAsia and the
Insurance US IPOs were discussed. Several divestment transactions
were proposed and the Supervisory Board mandated the Executive
Board to execute those transactions within the terms and
conditions approved. The Supervisory Board was also updated in
detail on the progress of the divestment of ING Direct USA and the
subsequent restructuring of the Illiquid Assets Back-up Facility
(IABF) agreement with the Dutch State. The Supervisory Board
approved the proposed divestment of ING Direct USA and
mandated the Executive Board to finalise the transaction within
theterms and conditions approved by the Supervisory Board.
In August, the Supervisory Board was informed that the
preparation for the Insurance EurAsia and the Insurance US IPOs
and the expected divestments were on track. The Supervisory
Board was informed on the hearing of ING before the European
Court regarding the EC restructuring agreement case. An update
ofthe transformation plan ING Belgium was presented.
In September, the Supervisory Board visited the insurance and
banking businesses in Madrid, Spain. During this visit the Supervisory
Board was informed extensively on the various operations of ING in
Spain and met with clients and national authorities. Furthermore,
the Supervisory Board approved the first phase in the legal
restructuring of Insurance in preparation of the envisaged IPOs.
Given the new regulatory and changing economic environment, a
first framework for an adjusted business plan for ING Bank and ING
Insurance/IM in the Netherlands was presented to the Supervisory
Board in September followed by a final business plan for ING Bank
and ING Insurance/IM in November. The Supervisory Board approved
both business plans in its November meeting. In December, the
Supervisory Board met to discuss the first outline of the Medium
Term Plan for 2012–2015 as well as possible changes to the strategy
including alternatives for an IPO of EurAsia.
During the internal meetings of the Supervisory Board – which the
CEO joined, except when the annual evaluation of the Supervisory
Board was tabled or the performance of the CEO was discussed –
the Executive Board 2010 performance assessments and the CEO
performance objectives for 2011 were approved. The main topic
during the year was succession planning as well as the possible
changes to the ING remuneration policy following the Capital
Requirements Directive III (CRD III) regulation and the Regeling
beheerst beloningsbeleid (Rbb, regulation on controlled
remuneration policy). In May, the Supervisory Board reviewed the
discussions on the Executive Board remuneration in Dutch society.
In September, the Dutch central bank (DNB) requirements to
implement a global remuneration framework were discussed and
approved, with some issues still under discussion. In September, the
implementation of a new joint rule of the AFM (the Netherlands
Authority for the Financial Markets) and DNB on expertise
requirements for Supervisory Board members was discussed
followed by approval of a Supervisory Board nomination procedure
in November. The Supervisory Board decided on the nomination of
59ING Group Annual Report 2011
Report of the Supervisory Board continued