Rabobank in business

The local Rabobanks are organised into 20 local committees on a geographical basis. The members/clients are represented on the committee boards by the management and supervisory bodies of the local Rabobanks. The committee boards form the Central Delegates Assembly, comprising 120 members. These members have four meetings a year with the full Executive Board, which are chaired by the chairman of the Supervisory Board. The Central Delegates Assembly is authorised to set rules to be complied with by all local member banks, and it also approves the annual plan and the budget of the local member banks. The outcome of this process in part determines the direction of Rabobank Nederland. The Central Delegates Assembly regularly discusses CSR-related topics. Examples are the duty of care and financial supervision, policy on employment terms and conditions, cooperative dividend, mobility, service quality and accessibility of services, the Rabobank Foundation, Project Fund and the Executive Board remuneration policy framework.

The Executive Board of the Rabobank Group consists of six members and is chaired by CEO Bert Heemskerk. CSR is explicitly embedded in the portfolios of the various members.

Download the 'CSR in Executive Board member portfolios' PDF below for more information.

The Executive Board has a major governance role in setting and implementing CSR policy by the group divisions. During the year it discusses numerous CSR-related matters. Examples are amendment of the genetic modification code, greening of the company lease car policy, intensification of the Rabobank Development Program, duty of care and financial supervision, important incidents such as fraud and robberies and the social responsibility activities of local Rabobanks. The board has also discussed the annual plans of the group divisions, and the CSR goals they incorporate. 

The members of the Executive Board also play an active part in highlighting the importance of CSR with senior management through their role as supervisory directors of the various group divisions such as Robeco, De Lage Landen and FGH Bank. 

The Supervisory Board supervises the policy of the executive management and the general course of affairs of Rabobank Nederland and the businesses associated with it. The board discusses and reviews matters including the attainment of the group objectives, the strategy, the business risks, the design and operation of the internal systems of risk management and control, the reporting process and compliance with statutory and regulatory requirements. It also regularly discusses CSR-related topics such as talent development for the boards of directors of local Rabobanks, and in particular the number of women on those boards, the presence of local Rabobanks in the local communities, innovation in local governance, the soy/deforestation issue in Brazil, the summary of the annual responsibility and sustainability report and the Rabobank Foundation annual report.

Rabobank attaches great importance to properly operating employee representation bodies. An effective works council with a clear and transparent contribution from employees provides valuable input for policy makers and directors. It also provides a platform of broad support for decisions, which facilitates their implementation and in turn benefits the motivation and commitment of employees. 

Various employee representation bodies are active within the Rabobank Group. Most local Rabobanks have a works council or employee representation of their own. In addition a Group Works Council for Local Member Banks has been in place since 1 June 2005 for the collective Local Member Banks. Rabobank Nederland has its own works council, as do De Lage Landen, Obvion, Robeco and FGH Bank. 

The employee representation bodies have a dual role: representing the interests of the employees and representing the objectives of the organisation in both social and economic terms.

The Corporate Social Responsibility Directorate is the central driver of CSR within the Rabobank Group. The directorate focuses on increasing the sustainability of both financial products and services and business processes and business operations. Innovation and integration are important core concepts in that respect. The directorate, in tandem with the Executive Board, formulates the CSR policy of the Rabobank Group at the strategic level and supports the commercial and operational units in translating the strategic policy into specific activities.

The CSR coordinators have an important role in transferring and embedding CSR policy within their business units. They also act as the first-call contact for the account managers of the Corporate Social Responsibility Directorate for the CSR-related activities taking place within the unit. In addition they have an important part in formulating the CSR targets incorporated in the annual plan for the business unit concerned. In terms of policy, CSR is always the responsibility of the Board of Directors of the entity or local Rabobank.

The Ethics Committee is an advisory committee for the entire Rabobank Group, which under the chairmanship of the chairman of the Executive Board advises on the application of the organisation’s values in situations presenting a moral dilemma. The committee also advises on CSR topics that affect its business activities. Any employee from any group division can submit issues arising in practice or ethically sensitive matters to this committee, whose members have extensive expertise in many different areas. Considerations are based on both our own code of conduct and internal conduct guidelines and the external rules of conduct to which the bank has committed itself. Examples include the Universal Declaration on Human Rights, the OECD (Organisation for Economic Cooperation and Development) guidelines, the ILO (International Labour Organization) covenants and the Global Compact. The Ethics Committee provides advice aimed at creating informal precedents to assist line management in taking financing and other decisions. In addition, the committee advises on topical issues of special concern to the bank, including nuclear energy or bio-energy. For Ethics Committee cases go to: http://www.rabobank.com/content/about_us/corporate_social_responsibility/dialog_accountability/Dilemmas.jsp

The Rabobank Group started systematic CSR monitoring in 2002, based on a set of performance indicators developed by Control Rabobank Group (CRG) and the Corporate Social Responsibility Department. From the annual responsibility and sustainability report 2003 up to and including that of 2005 these two departments carried out the annual data collection process. 

In 2006, CSR was further integrated into the planning and control cycle. Reporting is based on two policy objectives to be set annually by each group division. They are required to report on a quarterly basis on the attainment of the defined CSR targets. The Executive Committee receives a report on this every quarter, which is integrated into the regular reports. CRG is responsible for data collection and registration, verification of data accuracy and completeness, and periodical reporting on CSR performance. Reporting by local Rabobanks is an exception, as responsibility for this is borne by the Cooperative and Administrative Affairs Department.

Since 2004 Audit Rabobank Group (ARG) has verified the data in the annual responsibility and sustainability report in consultation with the external auditor involved in the verification process. ARG also verifies compliance with procedures. The purpose of the verification is to provide the reader with a degree of assurance that the reported data is correct. Providing a high level of assurance requires more, and more extensive, verification procedures than a lower level of assurance. The external auditor expresses the difference in his assurance report in terms of the formulations used (positive or negative). 
The Rabobank Group is aiming to provide a high level of assurance in an increasing number of areas. 

Since the reporting year 2005 our annual responsibility and sustainability report also complies with the guidelines of the AA1000 Assurance Standard. 

Responsive and responsible supervision and adequate management are intended to safeguard our integrity worldwide and protect our reputation. This starts with a systematic mapping of the relevant statutory and regulatory requirements and following developments in the field of generally accepted standards of integrity. The Supervisory Directorate ensures that management takes the required corrective measures in the case of non-compliance with external regulatory requirements (e.g. in the field of cartel formation and monopolies) and internal procedures. All cases of internal fraud are always reported to the police or competent judiciary authorities.

Evidently, employees must have the appropriate attitude in terms of compliance with regulations. To help ensure this, they are regularly alerted to the importance of compliance with internal and external codes and statutory regulations.

In 2006 all 198 local Rabobanks received comprehensive training on fraud, Customer Due Diligence (CDD), sanctions and disclosure of unusual transactions. The ‘internal review’ regulations form part of that training. The Crisis Management & Fraud Prevention department trains two people in every bank, after which these employees then spread what they have learned within their local Rabobank. The procedures to be followed can be consulted via the Rabobank intranet.

The compliance officers play an important part in supervision. The Supervisory Directorate is responsible for the functional management of the compliance officers. The officers periodically report their findings to the directorate. In addition they also report to the local management. This relates mainly to matters where Rabobank will not and cannot cooperate in undesirable activities on the part of clients, such as money laundering, financing of terrorism, insider dealing, price manipulation, tax offences and avoiding reporting obligations. 

As part of the CDD credit institutions and insurance companies regulation (‘Know Your Customer’) relevant policies have been formulated and procedures have been defined to divide our clients into categories. Some clients and products and combinations between them present greater risks than others, and procedures for the acceptance and identification of clients have been tailored to this. Compliance officers also review the conduct of the bank itself and its employees, in terms of insufficient duty of care, misleading communication, conflicts of interest and, again, insider trading and price manipulation. Every group division, every local Rabobank and every foreign branch office has a compliance officer who supports management in these fields.