Triodos Bank’s Executive Board provides a perspective on the wider world it operates in, its impact and activity in 2016 and its prospects for the future.
Activities of the Supervisory Board
Triodos’ strategic focus
The Supervisory Board, in various discussions, encouraged the Executive Board in their efforts to respond to a more challenging external landscape, both strategically and practically while remaining true to Triodos Bank’s essence. This wider environment includes a growing polarisation of groups within society, an increasing role of technology, a continuing low interest environment, stricter regulatory requirements and a growing number of opportunities in financing business with a much more focussed ‘climate change agenda’.
Impact, Risk, Return
2016 was marked by managed growth, increased impact and robust financial performance despite a low interest rate environment which had a significant impact on Triodos Bank’s financial performance. The ratio of funds entrusted to loans showed a slight improvement by the year end. The Supervisory Board still considers this to present a challenge both from a financial and a mission perspective and welcomed the steps the bank is taking to improve this balance further.
In its discussions with the Executive Board, the Supervisory Board pays particular attention to the continuing importance of Triodos Bank’s business model and its integrated focus on Impact, Risk and Return.
Because of changing capital requirements, the Supervisory Board monitors Triodos Bank’s financial health, its financial ratios, its capital position and the impact of stricter regulatory capital requirements. Triodos Bank is a mid-sized bank that complies with new regulations and is well-established for further growth.
During 2016, the following topics were also discussed at the Supervisory Board’s meetings and in contacts with the Executive Board:
- Strategy: the Triodos 2025 perspective and the update of the business plan 2016-2018 with a focus on 2017, developments in different countries and at Triodos Investment Management, the main strategic risks of the business, and a quarterly analysis of Triodos Bank’s overall performance and health.
- Finance: Triodos Bank’s economic developments and their financial impact. More specifically, the bank’s capital position, the 2015 financial results, the management letter, the 2015 Annual Report, the Executive Board Report and the 2016 half-year report.
- Risk and Audit: the design and effectiveness of the internal risk management framework and control systems, the ‘risk appetite’ and the actual risk profile, the audit findings, the auditor’s reports, quarterly reports and loan reports, the readiness for, and implementation of, new capital and other regulatory requirements.
- Human resource management: senior management development and talent management, organisational changes and the company culture, the annual revision of the international remuneration and nomination policy.
- Business Units: Meetings were held with the management of local branches and Triodos Investment Management by individual Supervisory Board members, together with a representative of the Board of SAAT and the Executive Board. Presentations to the full Supervisory Board were given by local branch management and Triodos Investment Management. The Supervisory Board closely followed developments in the branches in Belgium and the UK, particularly given changes in senior management and Germany because the branch has not yet reached break-even.
- Contacts with the Dutch Central Bank: The Chair, the Vice Chair and the Chair of the Audit and Risk Committee met twice with the Dutch Central Bank.
- Contact with the Board of SAAT: A Supervisory Board delegation had an informal meeting with a delegation from the Board of SAAT in advance of the Annual General Meeting.