The Supervisory Board should supervise the activities and the decisions of the Executive Board and the general affairs of the company and its affiliated enterprise. The Supervisory Board fulfills its supervisory role while taking into account the impact, risk and return perspective that is fundamental to the mission of Triodos Bank.

2021: Challenging conditions – important transitions

The market conditions, where interest margins are thin, and competition is tough – increasingly also in the market segments in which Triodos Bank operates – continue to challenge the bank in its ability to realise profit. The Supervisory Board supported the measures to increase income, especially in fee-generating areas where the services of Triodos Bank stand out, like Triodos Investment Management. And the Supervisory Board similarly supported efforts to reduce costs via efficiency measures.

The impact of COVID-19 on economic activity and personal lives was severe in 2020. This challenging context continued in 2021. For Triodos Bank, this meant another year of strongly reduced in-person contact with clients, DR holders, and other stakeholders.

Unfortunately, the DR trade had to be suspended for a second time. The Supervisory Board was fully informed about this decision as well as about the process that the Executive Board initiated to find a proper structural solution together with a package of additional measures recognising various stakeholder interests.

2021 was also the year of leadership changes in the Executive Board. After a term of more than 20 years, CEO Peter Blom left the bank – Jeroen Rijpkema was recruited externally for the CEO-position. COO Jellie Banga also stepped down. For her succession we decided to split her role into two: Chief Commercial Officer (CCO) and Chief Operating Officer (COO). For these roles we recruited two internal successors: Jacco Minnaar and Nico Kronemeijer. For the new Executive Board appointments the Supervisory Board introduced a regular four-year term, open for reappointment. COVID-19 also brought several long-term illnesses among co-workers. With the admirable efforts of all co-workers, largely working from home, Triodos Bank managed to realise a year of good performance in customer service, impact, risk, and return.

Activities and focus areas of the Supervisory Board

Strategic focus and transition

The Supervisory Board was actively involved in probing and challenging the Executive Board in its efforts to renew the capital strategy of Triodos Bank. It became clear that the system of DR-trade at net asset value, which had served the bank well for over 40 years and which had withstood previous shocks to the economic system, like the financial crisis in 2008, had reached its limits. A new system would be required to simultaneously serve the purposes of enabling ongoing access to capital for Triodos Bank, providing conditions for trading of DRs and safeguarding the unique Triodos Bank-identity and mission. After a careful and in-depth process, the Supervisory Board supported the decision made by the Executive Board of listing, in due course, the DRs at a Multilateral Trading Facility (MTF) as a structural solution. As part of the capital strategy, the Supervisory Board welcomed and supported the issuance of Triodos Bank’s inaugural Tier 2 green bond in October 2021.

The leadership transition in the Executive Board was foreseen and prepared for in 2020 and realised in 2021. As a result of a process of assessment of internal and external candidates, Jeroen Rijpkema was selected in early 2021 to take over the CEO position in May 2021. The transition took place in the Annual General Meeting of 21 May 2021. Initially this appointment was intended for a two-year term. However, the need for continuity in the leadership in times of transition in the capital strategy, in combination with the immediately effective performance of Jeroen Rijpkema during the process of taking over from the former CEO, brought the Supervisory Board to the intended decision to extend his term to a regular four-year term. We thank Peter Blom for his strong leadership and his formidable contribution to the Bank and its mission.

When COO Jellie Banga announced that she was stepping down from her role as COO effective 1 May 2021, the Supervisory Board and Executive Board reviewed the roles and composition of the Executive Board. We concluded that the current and future challenges are best served with an Executive Board of five members. The Supervisory Board thanks Jellie for her strong professional performance and her dedicated contributions to the mission of the bank. The appointment of the new COO and CCO were announced and discussed at the Extraordinary General Meeting of 28 September 2021. With these appointments we do not comply with our own standards of diversity - in particular gender balance – so this remains a point of strong attention for future appointments in all leadership levels.

In 2021 the Supervisory Board changed the composition of its committees: Mike Nawas moved from the Audit and Risk Committee to chair the Nomination Committee and join the Remuneration Committee. Fieke van der Lecq left the Nomination and Remuneration Committees to become a member of the Audit and Risk Committee. In May, the four-year term of Fieke van der Lecq came to end, and she decided not to be available for a second term. In the recruitment process of the replacement of Fieke van der Lecq, the Supervisory Board invited the Dutch Works Council to nominate a candidate and cooperated with the Works Council to set the profile and to recruit the candidate. This resulted in the appointment of Danielle Melis in the Extraordinary General Meeting of 28 September 2021. Danielle Melis joined the Audit and Risk Committee and the Remuneration Committee. To strengthen the composition of the Supervisory Board regarding digital strategy and international profile, we also recruited Susanne Hannestad as per this date as a new Supervisory Board member. She too became a member of Audit and Risk Committee. Mike Nawas took over from Fieke van der Lecq as vice-chair of the Supervisory Board Dineke Oldenhof succeeded her as Chair of the Remuneration Committee. We thank Fieke van der Lecq for her professional, personal and meticulous performance as Supervisory Board Member.

Governance

In 2021, the Supervisory Board had 6 formal meetings and 13 additional meetings. A number of these meetings took place online. Other topics discussed at the Supervisory Board's meetings and contacts with the Executive Board included:

  • Finance: as in 2021 the potential impact of COVID-19 on the Bank’s finances was significant but mitigated by solid financial management. The Return on Equity developed positively, beyond budget, despite COVID-19. The Supervisory Board monitored the metrics monthly and discussed these with the Executive Board. See also the report of the Audit and Risk Committee. As usual, the Supervisory Board discussed the Management Letter and Board Report of the External Auditor, the 2020 annual report plus the half year 2021 results and the respective press releases, as well as the dividend proposal.

  • Risk and Audit: the risk appetite statement, the actual risk profile, and the effectiveness of the internal risk framework and control systems, the audit findings, the auditor's reports, loan reports and implementation of new regulatory requirements were all discussed in plenary at the Supervisory Board after preparatory discussions in the Audit and Risk Committee.

  • Culture Change Effectiveness: the Supervisory Board continued to supervise the Culture Change Effectiveness programme. Due to COVID-19 priorities, further development of this programme was put on hold by the Executive Board. Going forward, the Supervisory Board will monitor the alignment of this programme with the Strategy and Business Plan 2022.

  • Equity, Diversity and Inclusion: the Supervisory Board encouraged the Bank’s efforts to enhance its policy and performance regarding equity, diversity and inclusion. In order to be more inclusive, Triodos Bank has to make more progress. The Supervisory Board welcomed the plans and actions of the Executive Board.

  • Works Council: in accordance with the Works Council Act (WOR), a delegation of the Nomination Committee attended two consultative meetings of the Dutch Works Council with the CEO, during which the general affairs of the company were discussed (AGvZ-overleg). Because of COVID-19, these meetings were held online. In addition, consultations were held with the Dutch Works Council about the leadership transition in Executive Board and the Supervisory Board vacancies.

  • Talent Management: the Supervisory Board had informal bilateral (online) meetings with senior managers aimed at getting to know each other better and to increase awareness of how roles and functions are performed in day-to-day practice.

  • Business Units: this year the Supervisory Board visited the Belgian branch where we met extensively with the local management team, co-workers and visited some of Triodos Belgium’s clients.

  • In 2021, the online deep dives that were executed by the respective managing directors and senior management from Head Office were completed. The Supervisory Board gained more insights into the achievements and challenges of all the business units.

  • Contacts with the Dutch prudential supervisor: the Supervisory Board met with De Nederlandsche Bank (DNB), the Dutch central bank, in autumn 2021. During the year, the Chair and Vice-Chair had several calls with DNB to keep them updated on the leadership transition process.

  • Contact with the Board of SAAT: the Supervisory Board met with the Board of SAAT as usual before the Annual General Meeting. In addition, the (Vice) Chair joined the Board of SAAT meetings as observer to share the Supervisory Board’s vision when asked by the Board of SAAT.

Internal organisation

Composition of the Supervisory Board

The Supervisory Board aims to be diverse, with an adequate balance of nationalities, age, experience, background and gender. For gender diversity, the Supervisory Board has a quantified objective for no more than 70% of its seats to be held by either gender. In 2021, there were four male and three female Supervisory Board members. Consequently, the Supervisory Board complies with its gender diversity policy.

Committees of the Supervisory Board

The Supervisory Board has three standing committees to prepare its decision-making and to advise the Supervisory Board on specific matters: the Audit and Risk Committee, the Nomination Committee and the Remuneration Committee. During the latter half of 2020 and part of 2021, an ad hoc Supervisory Board DR Subcommittee was formed to regularly discuss the Depository Receipts situation with a delegation of the Executive Board. The members of the DR subcommittee are Mike Nawas, Sébastien D’Hondt and Ernst Jan Boers.

These committees met separately throughout the year, sometimes online, sometimes in person. Their main considerations and conclusions were shared with the Supervisory Board, where formal decision-making takes place.

The composition of the committees in 2021 was as follows:

Audit and Risk Committee

  • Ernst Jan Boers (Chair)

  • Sébastien D’Hondt

  • Susanne Hannestad (since 28 September)

  • Fieke van der Lecq (from 16 January until 31 March)

  • Danielle Melis (since 28 September)

  • Mike Nawas (until 16 January)

Nomination Committee

  • Aart de Geus (Chair until 9 February)

  • Mike Nawas (Chair since 9 February)

  • Fieke van der Lecq (until 15 January)

  • Dineke Oldenhof

Remuneration Committee

  • Dineke Oldenhof (Chair since 21 May)

  • Fieke van der Lecq (Chair - until 21 May)

  • Aart de Geus (until 19 August)

  • Mike Nawas (since 19 August)

  • Danielle Melis (since 28 September)

For more information on the Supervisory Board members, see Appendix II – Executive Board, Supervisory Board and Board of SAAT biographies .

Terms of office of Supervisory Board members (as per December 31, 2021)

Supervisory Board

Year of first appoint- ment

Year of first reappoint- ment

End of current term

Envisaged retirement1

A&RC

NomCo

RemCo

Aart de Geus (Chair)

2014

2018

2022

2022

-

-

Member

Mike Nawas (Vice-Chair) 2

2019

-

2023

2027

 

Chair

Member

Ernst Jan Boers

2014

2018

2022

2022

Chair

-

-

Sébastien D’Hondt

20193

-

2024 3

2028

Member

-

-

Susanne Hannestad

20214

-

2025

2029

Member

-

-

Danielle Melis

20215

-

2025

2029

Member

-

Member

Dineke Oldenhof

2018

-

2022

20226

-

Member

Chair

1

Based on internal Supervisory Board policy, a 2 x 4-year term is considered standard practice. In exceptional circumstances this term can be extended to 12 years or beyond, after approval of the general meeting (article 9 (6) Articles of Association).

2

Since 21 May 2021

3

Sébastien D’Hondt has been appointed at the EGM on 13 December 2019. End of his first term is after the AGM in 2024.

4

Susanne Hannestad has been appointed at the EGM on 28 September 2021. End of her first term is after the AGM in 2025.

5

Danielle Melis has been appointed at the EGM on 28 September 2021. End of her first term is after the AGM in 2025.

6

Dineke Oldenhof is not available for a second term of office and therefore intends to step down at the 2022 AGM.

Activities of the Audit and Risk Committee

The Audit and Risk Committee (ARC) met, in accordance with the corporate calendar, six times. An extra ARC meeting was held end of March, in which the yearly internal reports on capital and liquidity adequacy were discussed and the recovery plan was prepared for Supervisory Board approval, in order to ensure a timely submission of these documents to De Nederlandsche Bank.

In addition to its regular meetings, informal meetings were held with the external auditor as well as with the internal auditor, without the Executive Boardbeing present. Also, the ARC Chair conducted separate sessions with, among others, the Group Director Internal Audit, the Group Director Finance, and the Group Director Compliance.

During the year, the composition of the Audit and Risk Committee changed. Mike Nawas left the ARC to become Chair of the Nomination Committee in January and Fieke van der Lecq temporarily joined the ARC (January - May). After the Extraordinary General Meeting in September 2021, Danielle Melis and Susanne Hannestad were appointed as Supervisory Board members and joined the ARC. Both new members participated as guests in the August ARC meeting prior to their appointments. Furthermore, Nico Kronemeijer as the Chief Operating Officer, joined the ARC meetings from December onwards as a permanent attendee.

The four ARC members, the Chief Financial Officer, the external auditor and the Group Director Internal Audit were present at all ARC meetings. The CRO was absent during the May and August meetings, with temporary replacements. Internal experts on areas like Finance, Control, Tax, Risk, Compliance, Capital Management, Retail Banking, and ICT were invited to the meetings, as required. In case Triodos Investment Management (T-IM) topics were discussed, management of T-IM was invited.

In its regular meetings, the ARC discussed and prepared for Supervisory Board approval, amongst other things, the half-year and annual results, the 2022 budget, the In Control Statement, the dividend proposal, the engagement of the external auditor, the risk appetite statement, enterprise risk management, the annual compliance plan, the annual Group internal audit plan, the internal audit framework, and the policy on external auditor’s independence. Two key audit matters, the expected credit loss provision on loans and fair value measurements of financial instruments, were discussed in the ARC meeting prior to Supervisory Board discussion.

Furthermore, as part of the regular agenda, the ARC discussed the overall and business unit financial results and outlook, the capital planning, Triodos Bank’s risk profile and the progress on (ICT) risk control improvements, adherence to laws and regulations governing financial and regulatory reporting, and tax- related issues. The main recurring reports providing input for these discussions are the Enterprise Risk Management (ERM) report, including all risk areas, as well as the quarterly reports from Finance and Control, Internal Audit and the Regulatory Desk departments.

Also, the results of the yearly evaluation of the external audit process were discussed. The external auditor presented their board report, management letter, their long-form report on regulatory reporting, their audit plan and the audit fees, as well as their independent audit and assurance reports. Moreover, the ARC discussed the outcomes of the strategic risk considerations of the Group year plan 2022, the outcomes of the systematic integrity risk analysis, the insights on (the inventory of) conflicts of interest, the effectiveness of the insights on strengthening Triodos’ overall product governance and the stress test scenarios, as well as the maturity level of the data governance, with a focus on the assurance and monitoring of the data quality.

One of the foremost topics that required specific attention in 2021, was the issuance of Triodos Bank’s first tier 2 green bond, as well as the outcomes of the private point in time rating by Fitch, and the cost containment and organisational changes. Also, the outcomes and progress made on several remediation projects were discussed, e.g., on compliance risk and the profitability of the business model, the supervisory review and evaluation process, the deposit guarantee scheme, and the follow-up of the formal instruction Triodos Bank Netherlands received from DNB in March 2019 regarding the Anti-Money Laundering and Countering Terrorism Financing procedures. An analysis of implementation of these AML/CTF procedures for all the branches outside of the Netherlands was presented in ARC.

Activities of the Nomination Committee

The Nomination Committee had six formal meetings in accordance with the corporate calendar and 14 additional meetings.

A significant part of the Nomination Committee’s agenda was dedicated to the leadership transition within Triodos Bank, as in 2021 many changes in the composition of the Executive Board and Supervisory Board were successfully completed. At the AGM in May 2021, the new CEO was appointed, Jeroen Rijpkema. A change of CEO is always material, but at Triodos Bank, this was even more so given the very extensive track record of the previous CEO, Peter Blom, who led Triodos Bank for more than twenty years.

Further changes to the Executive Board were implemented in 2021: the COO, Jellie Banga, announced her intention to step down in May 2021, after which the Supervisory Board decided to split the COO role in two separate roles: a COO focused mainly on Triodos Bank’s operating model and a CCO focusing on the business model. This expansion of the Executive Board was important to ensure dedication at the executive level to the strategic changes in the business and operating models to position the bank even stronger for the future. An internal recruitment process was run, resulting in the appointment of two new Executive Board members from within Triodos Bank: Nico Kronemeijer as COO and Jacco Minnaar as CCO.

Also two new members of the Supervisory Board were nominated and appointed in 2021: Susanne Hannestad and Danielle Melis. The Nomination Committee worked collaboratively with the Dutch Works Council of Triodos Bank for one of these Supervisory Board members to take on the role of Supervisory Director by Nomination (Voordrachtscommissaris) for the first time in the history of Triodos Bank.

In 2021, the NomCo worked across a number of themes important for the future of Triodos Bank: talent management within the organisation; the objective setting and performance review process of the Executive Board members; maintaining the connection between Triodos Bank’s roots, its mission and actions; and working on the equity, diversity and inclusion goals of the bank. Progress on these themes will be monitored.

The annual self-evaluation of the committee resulted in a discussion with the Executive Board on the breadth of strategic HR topics on which the Nomination Committee, on behalf of the Supervisory Board, intends to focus during the coming years. Highlighted topics were, amongst others, succession planning, talent development, performance management. There is a requirement for HR data enhancement to go hand in hand with supervision on these topics, and the Nomination Committee specified its wishes in this regard.

The Nomination Committee agenda also included also recurring topics such as the preparation of the Permanent Education programme, the Supervisory Board self-evaluation process. The committee also prepared the assessment of the profile and the composition of the Supervisory Board.

Activities of the Remuneration Committee

The Remuneration Committee had six formal meetings in accordance with the corporate calendar. The agenda included recurring topics, the compliance check with the applicable Dutch and European remuneration rules, the International Remuneration and Nomination policy, the List of Identified Staff and the discussion about the remuneration proposals for the members of the Executive Board and the remuneration approach for senior management. The remuneration proposals have also been assessed in the light of the consequences of COVID-19 for society, for Triodos Bank’s co-workers and for Depository Receipt holders.

As usual, the committee has also taken note of the Eumedion report 2021, in particular of remuneration-related themes of listed companies. In its work and discussions, the Remuneration Committee takes the mission, in which human dignity is central, to heart. This approach should be proportionate to remuneration market-practices in the banking sector.

Based on this principle, the Remuneration Committee has been actively involved in the determination of the terms of employment and settlement agreements for new EB members and an EB member that left the bank in 2021, and the guidelines to be used for severance payments for senior management.

In 2021, the sustainability and adequacy of pension provisions throughout the Group were reviewed. This showed that the bank’s pension provisions can be considered adequate, but the practices per country differ, so harmonisation is not yet opportune.

In 2019 the Annual General Meeting approved the adjustment of the remuneration of Supervisory Board members including the possibility to evaluate and adjust the remuneration. The fixed remuneration of the Supervisory Board members was not adjusted for inflation in 2020 and 2021 based on the consequences of COVID-19 and in solidarity with the co-workers and Depository Receipt holders of Triodos Bank.

Supervisory Board competence matrix

The matrix below lists the key competences of the individual members of the Supervisory Board, which are relevant to their supervisory position. For an individual to qualify as a member of the Supervisory Board, the following three attributes are required:

  • Affinity with the mission and values of Triodos Bank

  • Senior management experience

  • International experience

All Supervisory Board members meet these criteria. The table below lists further competences in the key areas described in the Supervisory Board’s profile. It highlights areas in which Supervisory Board members have substantial expertise and helps to assess whether the Supervisory Board has the appropriate skills to perform its duties. The matrix is based on requirements outlined in the collective profile of the Supervisory Board, which is regularly reviewed.

Members of the Supervisory Board are appointed for a term of four years. It is standard practice that members of the Supervisory Board resign after their second term. However, reappointment after the second term is possible in exceptional circumstances, as stipulated by the Dutch corporate governance code.

Key areas of expertise

Name (nationality)

Year of birth

Gender

Sustainability & other expertise particularly relevant to Triodos

Banking & Finance

Audit & Risk

HR & Organisational Development Corporate governance

Digitisation & Innovation

Aart de Geus (Dutch)

1955

M

 

 

 

Mike Nawas (Dutch-American)

1964

M

 

 

Ernst Jan Boers (Dutch)

1966

M

 

 

 

Sébastien D’Hondt (Belgian)

1964

M

 

 

Susanne Hannestad (Norwegian)

1961

F

 

 

Danielle Melis (Dutch)

1972

F

 

 

Dineke Oldenhof (Dutch)

1958

F

 

 

 

Meetings of the Supervisory Board

All regular meetings of the Supervisory Board are held jointly with the Executive Board. Every meeting in 2021 was preceded by an internal meeting in which only Supervisory Board members participated. One internal meeting focused on an appraisal and evaluation of the members of the Executive Board.

The Supervisory Board attended the local meetings with Depository Receipt holders that were organised by the Executive Board to engage with Depository Receipt holders and to listen to their opinions and suggestions following the announcements made in the Extraordinary General Meeting on 28 September 2021 with respect to Depository Receipt situation.

On an individual basis, the board members stayed in touch with the managing directors, via online meetings and calls.

The annual meeting with the board of SAAT was also held via an online call. The annual meeting with the external supervisors of De Nederlandsche Bank was held in their office and was considered fruitful by both parties. See also above (Other topics).

Attendance of the Supervisory Board members in 2021

Supervisory Board members in 2021

Formal Supervisory Board Meetings

Formal Audit and Risk Committee Meetings

Formal Nomination Committee Meetings

Formal Remuneration Committee Meetings

Aart de Geus

83%

-

100%

100%1

Fieke van der Lecq2

100%

100%

 

100%

Ernst Jan Boers

100%

100%

100%

 

Sébastien D’Hondt

100%

100%

-

 

Susanne Hannestad3

100%

100%

 

 

Danielle Melis4

100%

100%

 

100%

Mike Nawas

100%

 

100%

100%5

Dineke Oldenhof

100%

-

100%

100%

1

Until 19 August 2021

2

Until stepping down on 20 May 2021

3

Since appointment on 28 September 2021

4

Since appointment on 28 September 2021

5

Since 19 August 2021

Independence and self-evaluation

Independence

The composition of the Board was such that members could act critically and independently of one another, the Executive Board and any other interest. The Supervisory Board complies with the independence criteria of the Dutch Corporate Governance Code.

Conflicts of interest

In accordance with the requirements of the Dutch Corporate Governance Code, the Supervisory Board has internal rules in place that govern any actual or potential conflict of interest of Board members. No conflict of interest occurred during 2021.

Education

As part of the Supervisory Board’s permanent education programme, the Supervisory Board organises meetings with both internal and external experts. In 2021, education sessions were organised on the following topics: ESG & sustainable finance reporting, 'the Digital Bank' and an update on relevant regulations applicable to Triodos Bank.

Self-evaluation

In 2021, the Supervisory Board performed a self-evaluation of the ways of working, including the assessment of the efficiency and effectiveness of meetings. The Supervisory Board continued with obtaining direct feedback from the Executive Board, the corporate secretary and fellow board members.

This resulted in improvements going forward. It was also noted that the competence diversity of the Supervisory Board is an asset, if accompanied by careful communication and efforts to align. Due to the frequency of contacts in the Triodos leadership transition process, the collaboration within the Supervisory Board has been intensified, and the team relations are considered open and constructive.

Conclusion

The Supervisory Board reviewed and approved the Annual Accounts and the Executive Board report.

These documents were evaluated by and discussed with the Executive Board, Internal Audit and the independent auditor. The Supervisory Board proposes that the Annual General Meeting adopts the Annual Accounts of 2021 and discharges the members of the Executive Board for their management of Triodos Bank during 2021 and the members of the Supervisory Board for their supervision. The Supervisory Board endorses the Executive Board’s dividend proposal of EUR 1.80 per Depository Receipt.

The Supervisory Board would like to thank all Triodos Bank’s stakeholders for their trust in Triodos Bank. Special thanks go to all co-workers of the bank for their efforts to keep running the bank during the challenging times of the COVID-19 crisis as well as the customers and DR holders for their long-term commitment to the bank and continuous belief in its mission to finance change and change finance. The Supervisory Board supports the Executive Board, and Triodos Bank’s co- workers, in their continuing efforts to make a positive difference to the development of people’s quality of life.

The Supervisory Board is confident that Triodos Bank will be able to meet the challenges in the coming years and will continue to be a frontrunner in responsible banking.

Driebergen-Rijsenburg, 16 March 2022

Supervisory Board,
Aart de Geus, Chair
Mike Nawas, Vice-Chair
Ernst Jan Boers
Sébastien D’Hondt
Susanne Hannestad
Danielle Melis
Dineke Oldenhof