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Committees of the Supervisory Board

The Supervisory Board has two committees as set out in the Corporate Governance 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

Nomination and Compensation Committee

  • Mathieu van den Hoogenband (Chair)
  • Aart de Geus
  • Udo Philipp

For more information on the Supervisory Board members, see the biographies.

Activities of the Audit and Risk Committee

The Audit and Risk Committee (ARC) met five times during 2016. Triodos Bank’s Chief Financial Officer, the Head of Internal Audit, the Director Risk, Director Finance 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.

In its regular review of the half-year results, the ARC satisfied itself that the bank’s financial 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 being discussed in the full Supervisory Board.

The internal audit function is the third line of defence in Triodos Bank. The Executive Board 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 2017. The ARC will monitor this closely.

As part of its regular agenda, the ARC reviewed and discussed the yearly update of the risk appetite statement, the risk appetite framework, as well as the annual ICAAP and ILAAP reports and recovery plan 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 reduced the concentration in the solar sector. Credit risk, operational risk and interest rate risk have been analysed thoroughly and new approaches have been presented to, and discussed in, the ARC. The ARC welcomes the improvement presented in those areas and the updated related policies, which form part of the further enhanced risk management framework which was put in place during the year.

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 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. For more information on the international remuneration and nomination policy please refer to page 120 of the annual accounts.

The nomination issues in 2016 included the composition of the Supervisory Board that led to an extensive recruitment process resulting in the nomination of candidate Supervisory Board members for appointment in the 2017 Annual General Meeting. The Chair of the NCC, together with the Supervisory Board Chair reviewed the performance of the members of the Executive Board in personal interviews, reviewing the priorities set for 2016 and setting new priorities for 2017. The NCC performed the management exit interviews of the Managing Directors of the UK and Belgian branches.

The NCC and the Executive Board initiated an annual ‘theme day’ session as part of a permanent education programme for the Supervisory Board and the Executive Board. In 2016, the programme focused on IT developments and the impact on banks (including a presentation on Triodos Bank’s Core Banking System and the ICT strategy), PSD 2 and Open Banking and developments in reputation management and customer/stakeholders expectations and needs.