Committees of the Supervisory Board
The Supervisory Board has two committees as set out in the chapter: the Audit and Risk Committee, and the Nomination and Compensation Committee. Both committees met separately throughout the year. Their main considerations and conclusions were shared with the Supervisory Board, where formal decision-making takes place.
The composition of the Committees is as follows:
Audit and Risk Committee
- Margot Scheltema (Chair)
- Marcos Eguiguren Huerta
- Carla Van Der Weerdt
- Ernst-Jan Boers (from 23 May 2014)
Nomination and Compensation Committee
- Mathieu Van Den Hoogenband (Chair)
- David Carrington
- Aart Jan De Geus (from 23 May 2014)
Activities of the Audit and Risk Committee
Meetings, composition, way of working
The Audit and Risk Committee (ARC) met four times during 2014. Triodos Bank’s Chief Financial Officer, the Head of Internal Audit, the Head of Risk Management and the external auditors were present at all meetings. In addition, one meeting was held with the external auditor, without the Executive Board being present. The Chair of the ARC also met separately with the external auditor from time to time.
Ernst-Jan Boers joined the ARC after his appointment to the Board in May. His recent banking experience will strengthen the Committee’s deliberations. The ARC’s secretariat has also been strengthened.
During the year, ARC aligned its way of working with Triodos Bank’s stronger focus on risk management. As a result two of the four ARC meetings will concentrate on risk, with audit and other matters included as less prominent agenda items. Results and audit matters will be the main topics in the other two meetings.
In its end of year review, the ARC satisfied itself that the figures had been agreed by the external auditor without any material changes, no unforeseen matters were brought to its attention and all accounting decisions and assumptions had been adequately supported and agreed. The ARC also reviewed Triodos Bank’s quarterly results in depth.
The internal audit function continued to develop its position as a third line of defence in Triodos Bank. The Executive Board now tables outstanding audit issues on its branch and business visits as standard practice. Further attention to audit follow-up is still required. The efficiency of the audit department, as measured by a number of KPIs, has been improved and will continue to be in 2015. The ARC will monitor this closely.
As part of its regular agenda, the ARC reviewed the yearly update of the risk appetite framework and statements, and the annual ICAAP and ILAAP reports to the Dutch Central Bank (DNB). A number of risk management improvements have been put in place under the leadership of a new Director Risk. The regular review of Triodos Bank’s concentration risk has led to further diversification measures, in particular away from the solar sector. A new risk rating methodology has been implemented successfully. This will bring a number of other benefits including opportunities for dynamic credit pricing, in the future. Both credit risk and interest rate risk have been analysed thoroughly and new approaches have been presented to the ARC and then to the DNB. The ARC welcomes the creation of these tools and related policies, which form part of the enhanced risk management framework which was put in place during the year.
Finally, the ARC was closely involved with the selection process for a new auditor starting with accounting year 2016. A carefully managed tender process has been carried out and a proposal will be presented in the General Meeting in May 2015.
Activities of the Nomination and Compensation Committee
The Nomination and Compensation Committee (NCC) met six times formally. The members of the NCC have senior management experience and knowledge of – and experience with – performance management and remuneration in general. Additionally they seek advice from independent, external experts in case of specific issues.
One of the NCC’s primary roles is to advise the Supervisory Board about the remuneration policy of Triodos Bank in general and to set the remuneration packages of its Statutory Directors. It also advises the Supervisory Board on the general conditions that determine the remuneration packages of Managing Directors reporting directly to the Statutory Directors. Triodos Bank’s international remuneration policy is in line with European and Dutch regulation regarding bank remuneration. For more information on the international remuneration policy please refer to the (PDF:) annual accounts.
The nomination issues in 2014 included the composition of the Supervisory Board, the nomination of Jellie Banga as a Statutory Director, and involved in the recruitment of a Corporate Secretary. The Chair of the NCC together with the Supervisory Board Chair reviewed the performance of the Statutory Directors in personal interviews, setting priorities for 2015. The NCC was also involved in a management exit interview.
The NCC organised a two day session as part of a permanent education system for the Supervisory Board and the Executive Board. In 2014, the programme focused on internal governance issues and on the essence of Triodos Bank in Triodos Bank’s wider strategy.