Practices and procedures of the Supervisory Board

The Supervisory Board operates within the legal framework of statutory, corporate governance and external regulatory requirements governing the work of supervisory boards. However, we consider our own views on our role to be equally, if not more, important in determining the manner in which we fulfil our duties and responsibilities in practice.

In this connection, we see a certain shift within Delta Lloyd Group. Supervision, control and critical monitoring are increasing in importance, mainly as a result of the greater uncertainty and risks in the market and the need to further restore trust in the industry. At the same time, we are playing a more prominent role in areas such as strategy-setting processes, key operational decisions, risk management and the implementation of large projects. To facilitate this shift, we are kept more broadly informed by the Executive Board. We also request additional information and hire external advisers where necessary. Contacts and information flows are more frequent and intensive.

In a two-tier governance structure, such a shift in focus must be managed with due attention, care and transparency. Clear lines of demarcation must be drawn between our deeper supervisory role and the Executive Board’s own responsibilities. There is an inherent tension between the intellectual independence vis-à-vis the Executive Board and involvement in the processes managed day-to-day by the Executive Board. This tension was therefore discussed during the evaluation of the functioning of our Board.

One important theme concerns the approach taken by the Executive Board and Supervisory Board in conducting their mutual relationship. Our starting point as the Supervisory Board is to engage critically and intensively with the company’s affairs while simultaneously seeking to prevent a regressive slide into more control and rules, information overload and interference at a detailed level. The Supervisory Board works on the basis of trust. We understand that putting a trust-based approach into practice is more difficult and demanding in a high-risk business. Nevertheless, we see this as the only proper way forward. The success of this approach depends largely on the knowledge, experience, skills, professional behaviour and attitude of everyone involved in the two Boards. These ‘board dynamics’ cannot, or can only partly, be laid down in rules and procedures. What matters, above all, is the spirit and integrity with which we fulfil our various roles. The Supervisory Board therefore adheres to rules of conduct in its relationship with the Executive Board. The ‘tone at the top’ of a company, both in the Executive Board and in the Supervisory Board, is of great importance. This is not only a standard element of the internal evaluation but also has our ongoing attention.

Our supervisory duties include the supervision of the good relations between the Executive Board and the company’s shareholders. The Supervisory Board is regularly updated on investor relations, including feedback after roadshows by the Executive Board. If it is thought important, the Supervisory Board will ensure that the Executive Board accepts requests from shareholders to talk to the company. The Supervisory Board is also open to contacts and consultation with them, albeit within a set of formal and procedural requirements with which we must comply as a listed company. The chairman fulfils this role on behalf of the Supervisory Board.

The Supervisory Board holds personal talks with external regulators. For example, on request, delegations from the Supervisory Board hold frequent discussions on a variety of issues with DNB and the AFM. Risk management has a significant place in this. Delegations also attend roundtable meetings that DNB and the AFM organise for supervisory boards in the financial sector.

The Executive Board discusses contacts and correspondence with external regulators with the committees and the chairman of the Supervisory Board. The chairmen of the committees then report on these matters to the plenary Supervisory Board. The chairman of the Supervisory Board monitors the follow-up to contacts with the external regulators.

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