ING Direct 2013 Annual Report Download - page 61

review in June and August, whereby the composition of the
Management Board Insurance was discussed in great depth
giventhe intended IPO of NN Group.
In August, the Supervisory Board approved the appointment of
Lard Friese as vice-chairman of the Management Board NN Group
as per 1 October 2013. An adjustedmandate for the Remuneration
Committee regarding remuneration proposals for Identified staff
was approved.
In the second half of 2013, the Supervisory Board discussed the
future composition of the Supervisory Board several times and
specifically the formation and start of a future independent
Supervisory Board for NN Group. A special Insurance Europe
Committee was set up given the IPO process for NN Group and to
commencethe search for candidates for the future NN Group
Supervisory Board.
In November, the format for the 2013 Supervisory Board self-
assessment was approved. The action points resulting from the
2012 self-assessment were acted upon during the year. For the
2013 self-assessment of the Supervisory Board, its Committees and
its members, which was conducted in December, an external
consultant drafted the questionnaires as well as the report based
on the outcome of the questionnaires. Furthermore, bilateral
meetings were held between the chairman and each Supervisory
Board member (concerning the chairman: a bilateral meeting
between the vice-chairman and the chairman). The self-assessment
resulted in action points concerning the meeting documents,
strategy discussions and HR topics.
Audit Committee meetings
In 2013 the Audit Committee met five times with no absentees to
discuss the quarterly results, the Annual Report, the Form 20-F
andthe reports from the external auditor.
The Audit Committee regularly discussed financial reporting,
internal controls over financial reporting, capital management and
regulatory matters. The shareholders agreement between ING
Group and ING U.S. as well as the Form S-1 registration statement,
which was submitted to the US SEC concerning the IPO of ING
U.S., was discussed regularly by the Audit Committee. Nationale-
Nederlanden Life actuarial and risk reporting, the developments in
the unit-linked products case and the capital plan for NN Group
were also topics of frequent discussion during the year.
Furthermore, risk costs and cost trends in general, solvency
volatility, deferred tax assets, the ING risk management
programme, lapse assumption models, pension changes and the
governance of the insurance activities in the Asian Pacific region
were discussed several times. In addition, the Audit Committee
discussed the ITincidents (DDoS attacks) at ING Bank, the Dutch
mortgage portfolio and the DNB asset quality review of the ING
Real Estateportfolio among other topics.
Given the new legislation which required ING to change its external
auditor as of January 2016, the Audit Committee selected a small
Audit Committee delegation to advise the Supervisory Board
further on theexternal auditor tender process. The Audit
Committee discussed and confirmed the topics mentioned in the
management letter byErnst & Young in the March 2014 meeting.
Directly following theAudit Committee meetings, the members of
In May, the Supervisory Board discussed self-regulation proposed
by the Dutch Banking Association and its associated “Bankers’
Oath” before taking the Oath in June.
The possible unwinding by the Dutch State of the Illiquid Asset
Back-up Facility was also discussed. The Supervisory Board was
updated on the capital plans for ING Insurance EurAsia and ING
Group in May and June whereby various possible divestments were
presented. A report to align staff functions with the adjusted size
of ING was presented.
A legal restructuring, in preparation for the possible IPO of NN
Group, was approved in August, including the consequences for
the governance structure. The first proposed equity narrative for
the NN Group IPO was presented and extensively discussed by the
Supervisory Board. The annual risk appetite statements for Bank
and NN Group were approved. An updated capital plan for ING
Bank was presented whereby several divestment transactions for
ING Bank were proposed. The Supervisory Board mandated the
Executive Board to execute those transactions within the terms and
conditions approved. The Supervisory Board was informed on the
scheduled EUR 1.125 billion repayment on the outstanding core
Tier1 securities to the Dutch State as well as the intention to
transfer all future funding and indexation obligations under ING’s
current closed Defined Benefit (DB) Pension Plan in theNetherlands
to the ING Pension Fund.
In September, the Supervisory Board visited the ING banking and
insurance businesses in the Netherlands. During this visit the
Supervisory Board was informed about ING’s various operations in
the Netherlands and on the IT strategy and IT infrastructure of ING
Bank. Furthermore, an update on the developments regarding the
Illiquid Asset Back-up Facility was given. A high level planning for
the NN Group IPO was presented and the future brand name for
the company was approved.
The Supervisory Board was further updated in November on the
preparation for the NN Group IPO, including the proposal to
include Japan Life in the scope of the IPO, which the Supervisory
Board approved.
In December, the Supervisory Board met to discuss the first drafts
of the NN Group MTP. The Supervisory Board was informed that
ING had completed the agreement with the Dutch State on the
unwinding of the Illiquid Assets Back-up Facility (IABF). An update
was given on the proposal to transfer all future funding and
indexation obligations under ING’s current closed Defined Benefit
(DB) Pension Plan in the Netherlands to the ING Pension Fund. An
agreement was reached with the pension fund in January 2014 and
it became effective in February 2014.
During the internal meetings of the Supervisory Board – which
theCEO joined, except when the annual evaluation of the
Supervisory Board was tabled or matters concerning the CEO
werediscussed – the Executive Board 2013 performance
assessments and theExecutive Board performance objectives for
2013 were approved.
All decisions regarding the variable remuneration proposals over
2012 were discussed and decided in February and March. The
INGU.S. remuneration policy was discussed and approved in
April.Succession planning and talent management were tabled for
59ING Group Annual Report 2013
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