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
- Carla van der Weerdt (Chair)
- Ernst-Jan Boers
- David Carrington (from 22 May 2015)
Nomination and Compensation Committee
- Mathieu van den Hoogenband (Chair)
- Aart Jan de Geus
- Udo Philipp (from 22 May 2015)
Activities of the Audit and Risk Committee
The Audit and Risk Committee (ARC) met five times during 2015. Triodos Bank’s Chief Financial Officer, the Head of Internal Audit, the Director Risk and the external auditors were present at all meetings. Three of the five ARC meetings concentrated on risk, with audit and other matters included as less prominent agenda items. Financial results and audit matters were the main topics in the other two 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.
Carla van der Weerdt has been a member of the ARC for 5 years and was appointed as Chair of the ARC in May, to succeed Margot Scheltema, because of her extensive experience with Triodos Bank and banking more broadly.
David Carrington joined the ARC in May, for his experience and the role he played in discussions about the oversight of the risk management of Triodos Bank, and to ensure a balanced distribution of competences across the committees. With his appointment, the Chair and Vice Chair of the Supervisory Board are divided over both committees. In its regular review of the (semi-) annual results, the ARC satisfied itself that the numbers 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 financial results and the outlook of the individual branches were discussed in the ARC before discussed in the full Supervisory Board.
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 and the added value of the audit department, as measured by a number of KPIs, has been improved and will continue to be in 2016. The ARC will monitor this closely.
As part of its regular agenda, the ARC reviewed and discussed the yearly update of the risk appetite framework and statement, as well as 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 the Director Risk. The regular review of Triodos Bank’s concentration risk has led to further diversification measures, which will reduce the concentration in 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 and discussed in 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 external auditor starting with the 2016 financial year. A carefully managed tender process has been carried out and the proposal has been approved 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. Udo Philipp joined the NCC in May as a new member.
One of the NCC’s primary roles is to advise the Supervisory Board about the remuneration and nomination policy of Triodos Bank in general and to set the remuneration packages of the members of the Executive Board. It also advises the Supervisory Board on the appropriateness of the general conditions of the remuneration packages of Managing Directors reporting directly to the Executive Board. Triodos Bank´s international remuneration and nomination policy is in line with European and Dutch regulation regarding remuneration of financial institutions. For more information on the international remuneration and nomination policy please refer to the .
The nomination issues in 2015 included the composition of the Supervisory Board and the nomination for appointment of a Board of SAAT member. The Chair of the NCC together with the Supervisory Board Chair reviewed the performance of the members of the Executive Board in personal interviews, setting priorities for 2016. The NCC was also involved in a management exit interview.
The NCC organised a two day session as part of a permanent education programme for the Supervisory Board and the Executive Board. In 2015, the programme focused on board dynamics, European regulation relating to among others banking, financial products and corporate governance, and Triodos Bank’s business model.