ING Direct 2015 Annual Report Download - page 22

Contents
Who we are
Report of the
Management
Board
Corporate
Governance
Consolidated
annual accounts
Parent company
annual accounts
Other
information
Additional
information
Report of the Supervisory Board - continued
In September and November 2015, updates were provided to
the Supervisory Board with regard to the
status of KPMG, ING’s new external auditor as per
the financial year 2016 in order to comply with the
mandatory external auditor rotation. KPMG declared
independence from ING per 1 October 2015 in its role
as new auditor and it was confirmed that KPMG’s
independence is compliant with applicable rules and
regulations. As of October 2015 EY is facilitating the
auditor transition.
Throughout the year the Supervisory Board was updated
on regulatory risk including the associated operational
and anticipated financial impact. Since the start of ECB
supervision the increase in regulatory reporting has
been significant. Also reporting timelines shortened and
requested data granularity has increased. ING aims to
safeguard that all reporting processes and data quality
continue to be up to standards. The aggregate impact of
upcoming new regulatory requirements is also expected
to be substantial, including in the form of additional
capital requirements.
Internal Supervisory Board meetings
During the internal meetings of the Supervisory Board
(which were joined by the CEO, except when the annual
self-evaluation of the Supervisory Board or matters
concerning the CEO were discussed), the Management Board
Banking 2014 performance assessments were discussed and
approved. Also the variable remuneration proposals for the
employees in scope relating to 2014 were discussed and
decided on. Furthermore the Management Board Banking
2015 performance targets were approved and the
Supervisory Board agreed to increase transparency
on these as from the 2015 Annual Report onwards.
Remuneration was a topic of discussion throughout the
year following updated legislation (CRD IV and the ‘Wet
Beloningsbeleid Financiele Ondernemingen’, WBFO). The
Supervisory Board discussed the implementation of
remuneration related changes for all employees in scope
in general and for the Management Board
Banking specifically. As part of this, peer benchmarking
and stakeholder feedback were taken into account. The
Supervisory Board also approved the accompanying
update to ING’s Remuneration Framework.
With regard to talent and succession planning in general,
the outcome of the Annual Talent Review 2014 was
discussed.
The future composition of the Supervisory Board, its
committees and potential candidates were also a topic
of discussion, including in connection with the departure
of Carin Gorter in September 2015.
Furthermore the Supervisory Board self-assessment was
on the agenda. The action points resulting from the 2014
self-assessment were acted upon during the year. As
was the case last year, an independent external party
facilitated the 2015 self-assessment process for the
Supervisory Board, its committees and its members by
drafting the questionnaires as well as the reports with
the results. The questionnaires incorporated elements
based on the renewed Dutch Banking Code that came
into effect on 1 January 2015. For 2015, input was also
requested from several executives that regularly interact
with the Supervisory Board and attend Supervisory
Board meetings. The questionnaires were completed
in December 2015, after which bilateral meetings were
held between the chairman of the Supervisory Board
and each member (for the chairman, a bilateral meeting
was held between the vice-chairman and the chairman).
The respective committee results were subsequently
discussed in each committee meeting, with the overall
results and conclusions being discussed in the internal
Supervisory Board meeting (without the Management Board
Banking members present). In general, the performance of
the Committees was rated highly overall and the
performance of the Supervisory Board was considered to have
improved since last year’s review. A number of suggestions
were made as priorities for improving the performance of the
Supervisory Board over the coming year, among others
including focusing on milestones in strategy, and the digital /
IT strategy in particular. Also continuing close monitoring and
assessing the developments in the regulatory and external
supervision landscape as well as in ING’s businesses were
identified as key priorities, to be supported by educational
sessions as deemed necessary.
Audit Committee meetings
In 2015, the Audit Committee met five times. On
average, 95 percent of the members were present at the
scheduled meetings.
The Audit Committee discussed the quarterly results, the
interim accounts and the annual accounts. Key audit matters,
as included in the auditors’ reports, were also
a topic of discussion. In addition to the financial results
and accounts, the subjects of the Audit Committee’s
regular deliberations also included financial reporting,
auditor’s independence and fees, the overall internal
control environment in general, the internal controls
over financial reporting, the external auditor reports
and management letters, and capital management
related matters. The Audit Committee also reviewed
the quarterly press releases related to the results and the
Annual Report.
Specific attention was paid to a variety of other, related
topics as well, such as the outcome of and ING’s follow-up
to the ECB Comprehensive Assessment process
and Asset Quality Review (AQR), IT risk, regulatory risk
(including its operational and anticipated financial
impact), loan loss provisioning, CDD, FATCA, the CRR
remuneration disclosures and sector-wide reviews on
market conduct.
The Audit Committee advised positively on the proposal
to advance the publication dates for the ING Bank
2015 Annual Report and the quarterly results from 2016
onwards.
Furthermore the Audit Committee was briefed on the
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