How we are supervised

Supervisory Board committees

In 2008, there were nine full Supervisory Board meetings. One meeting was hosted by Eureko Sigorta and Garanti Bank in Turkey during which members were able to gain greater insight in this recent acquisition (2007) and the potential of its market.

The Supervisory Board has three dedicated committees: the Audit, the Remuneration and the Selection and Appointment Committees. The Supervisory Board takes decisions based on, among others, the advice of its committees. Three Supervisory Board members form the Audit Committee. The CFO and the Executive Board member responsible for audit and risk attend Audit Committee meetings. The Audit Committee also meets annually with KPMG to evaluate management. The Remuneration Committee and the Selection and Appointment Committee both consist of five members drawn from the Supervisory Board. The CEO attends the meetings but absents himself during agenda items where his own functioning or remuneration is discussed or in other cases when the Chairman so requests. The Remuneration Committee met once in 2008 and the Selection and Appointment Committee met three times in 2008.

The Audit Committee

The Audit Committee is responsible for monitoring Eureko’s financial reporting processes, including risk management, compliance and internal control. It advises on the selection of external auditors and actuaries and monitors both their performance and independence. In 2008, the Audit Committee met seven times; external auditor KPMG is always present. Regular meetings are scheduled ahead of key reporting dates and on an ad hoc basis where necessary. As the financial crisis took hold, the Audit Committee was closely involved in strategies relating to investment policy, risk management, specifically organisation, capital and liquidity management, and policy on impairments.

The Audit Committee met once with the auditors, KPMG, without management, and furthermore reviewed full-year 2007 results, annual reporting, and individual business components, such as actuarial reports on the adequacy of insurance liabilities. In addition, they discussed the management letter. These topics, along with risk management, compliance reporting, internal auditing and control plans and the financial aspects of proposed mergers and acquisitions, are regular agenda points throughout the year. Eureko’s preparations on Solvency II and International Financial Reporting Standards on insurance contracts were also important topics during the year.

The transition to Market Based Interest accounting, in preparation for future regulatory requirements, was also a topic during the year, although as yet no policy changes have been made. The Audit Committee paid extensive attention to Eureko’s investment policy and operational performance.

The Remuneration Committee

Monitoring the application of Eureko’s remuneration policy is a key task for this Committee. Eureko’s policy is aimed at recruiting and retaining the highest calibre executives. A regular review of remuneration is carried out to ensure that reward levels are appropriate to the duties and responsibilities of the role, including a suitable balance between fixed and performance-related elements. In determining salary levels for executives, comparisons are routinely made across the industry, usually every two years. Through the year, the Remuneration Committee evaluates Executive Board performance against pre-set targets. These targets represent a balanced four-stakeholder – customers, distribution partners, shareholders and employees – approach. They include Net profit, cooperation with Rabobank, performance measurement and employee satisfaction. The committee subsequently makes proposals for long-term variable income components. The Central Works’ Council receives a report on total remuneration of both senior management and the Supervisory Board annually. This report was submitted to the Central Works’ Council for the first time in 2007. In 2008, the average remuneration amounted to €1.23 million; the variable component, €0.21 million, relates to performance in 2007 and approved by the Supervisory Board in April 2008. The Executive Board has declined any variable remuneration over 2008 for senior management due to the disappointing results over that year. Although it is the Remuneration Committee’s responsibility to make recommendations on variable compensation of the Executive Board, members of that board have decided to waive all variable payments over 2008.

The Selection and Appointment Committee

As its name suggests, this Committee is focused on recruiting Executive Board members and evaluating the performance of the Executive Board as a team and individually. Performance targets for the Executive Board as a whole and its members are established under its supervision. Furthermore, the Committee evaluates interaction between the Supervisory and Executive Boards. In 2008, the Committee discussed the resignations of Mr Roel Wijmenga as per 1 July 2008 for personal reasons and the retirement of Mr Huub Hannen on 1 October 2008 and the leaving of Mr Dijkshoorn as per 1 January 2009. In addition, they supervised the appointment of Mr Thomas van Rijckevorsel as of 1 April 2008, and Messrs Jeroen van Breda Vriesman and Danny van der Eijk as of 1 October 2008. On the same date, Messrs van Duin and van Olphen were appointed vice-chairmen of the Executive Board.

Changes in Supervisory Board composition

Mr Flip Buurmeijer’s nomination to the Supervisory Board was approved by the General Shareholders’ Meeting of 24 December 2007 and became effective as of 1 January 2008. Messrs Walravens, Minderhoud and Slijkhuis were reappointed for a second term effective March 2008. Mr Lense Koopman’s term expires in 2009 and he will not be seeking reappointment due to other commitments. Mr Stambouli has decided to step down as per 31 December 2008. We are grateful for their contribution over the past four years. The two vacancies will be filled in the coming months.

2008 financial statements and dividend

The financial statements have been audited by KPMG Accountants N.V. They have issued an unqualified opinion. In accordance with the proposal of the Executive Board and the recommendation of the Audit Committee, the Supervisory Board endorses the adoption by shareholders of the 2008 Financial Statements and, due to the results in 2008, proposes not to pay dividend on ordinary shares. However, the proposal will be for the payment of dividend on preference shares and hybrid capital securities. As well as adopting the Financial Statements and the dividend proposal, the General Meeting of Shareholders is requested to discharge the members of the Executive Board from all liability in respect of their management and to discharge the members of the Supervisory Board from all liability in respect of their supervision for the year under review, 2008.

We are grateful for the commitment of Mr Wijmenga to the Eureko Group in recent years. Our thanks also go to Huub Hannen, who retired on 1 October 2008, for his role at Eureko and Interpolis for almost 38 years. We express our gratitude for the contribution of Mr Dijkshoorn as Chairman of the Executive Board and thus to the development of the Group. On 10 February 2009, Willem van Duin, who has served on the Executive Board since 2004, was appointed Chairman of the Executive Board.

We would like to take this opportunity to thank the Executive Board, all the 25,000 Eureko people across Europe and the Works’ Council for all their hard work and commitment during what has been a historically challenging year.

Arnold Walravens
Chairman of the Supervisory Board
6 April 2009