The Dutch Banking Code ('Code Banken') was drawn up by the Netherlands Bankers' Association (NVB) in response to the report entitled 'Restoring Trust' ('Naar herstel van vertrouwen'), which was published by the Advisory Committee on the Future of Banks (Adviescommissie Toekomst Banken) on 7 April 2009. The recommendations of the Advisory Committee’s report have been used as the basis for this Banking Code. The Dutch Banking Code came into force on 1 January 2010 and was updated per 1 January 2015.
The Banking Code is mandatory for RBS NV as stated in Book 2 of the Civil Code, article 391, section 5 as from 1 January 2010. It applies to all activities performed by banks that are in possession of a banking license granted under the Financial Supervision Act (‘Wet op het financieel toezicht (WFT)’).
The Code offers specific provisions, but underlying these provisions its aim is to instil learning in the banking sector following the financial crisis. Drawing lessons and implementing change with the aim to restore trust among all our stakeholders,: clients, staff, investors and society at large. As is well-known, RBS Group has undergone and continues to undergo deep change following the crisis. RBS Group’s business strategy has been formulated anew, its top management has been comprehensively replaced, its corporate governance has been strengthened (including a drive for best practice disclosure and transparency), its corporate culture is being reshaped to reinforce responsibility and checks and balances within the organisation, and finally, cutting through all of these changes, its risk management structure and practices are being upgraded to take on the sound role that risk management must fulfil in a longer-term sustainable bank. All this is done so as to offer a basis for the recovery of the excellent businesses present in the company.
We are aware of the fact that our long term success fully depends on how successful we are in servicing our clients. To that extent, we have taken additional measures to further embed “a client led culture” in our organization. Over the past few years certain themes in this area have been fleshed out in detail, resulting in the “Customer Charter” and the “Treating Customers Fairly Policy”. The Customer Charter describes 14 ‘customer commitments’ divided into the following four categories:
- Make banking easy
- Help when you need us
- Support the communities in which we work
- Listen to you
More information about the Customer Charter can be found on the website: www.rbs.com
The policy towards customers takes into account the so-called ‘Treating Customers Fairly outcomes’ as defined by the UK Financial Services Authority. These outcomes provide an indication of whether customers are genuinely receiving fair treatment. Six outcomes have been defined:
- Customers can be confident that they are dealing with firms where the fair treatment of customers is central to their corporate culture;
- Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly;
- Customers are provided with clear information and are kept appropriately informed before, during and after the point of sale;
- Where customers receive advice, the advice is suitable and takes account of their circumstances;
- Customers are provided with products that perform as forms have led them to expect, and the associated service is both of an acceptable standard and as they have been led to expect; and
- Customers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.
- The products and services which RBS Group provides to its customers are designed to meet the needs of the various client groups. In the Netherlands, RBS NV primarily serves wholesale customers. The products and services which RBS NV provides to these customers have been tailored accordingly and the above mentioned Treating Customers Fairly outcomes are applicable, where appropriate. With respect to the products and services offered to retail investors through intermediaries we use methods including market research to gauge the requirements and opinions of (potential) customers.
Management is informed of the results of the customer commitments by means of reporting.
Corporate Governance codes and the global footprint of RBS Group
RBS NV is ultimately owned by RBS Group plc, a company incorporated in the United Kingdom. When implementing the Code, the Managing Board and Supervisory Board of RBS NV will take into account the effects of similar Codes of Conduct implemented elsewhere in the Group with the aim to maintain a level playing field within the divisions of the Group.
1. Compliance with the Banking Code
Against this background, below is where we stand in each of the specific areas specific in the Banking Code. RBS NV considers the Code as an important yardstick for the way banks draw lessons from the crisis, and is well advanced complying with the specific provisions of the Code.
2. Supervisory Board
The required expertise and experience are well embedded in the Supervisory Board providing for an independent board with a diverse composition. The board consists of top executives of RBS Group with broad banking experience, and of one external, independent member with international business experience. If, for some reason, the board would have a vacancy for a new Supervisory Board member, a new member would be sought based on an established supervisory board profile to ensure that the knowledge and expertise obtained when filling the vacancy is fully complementing the composition of board.
If the position of Chairman of the Supervisory board would become vacant, a separate individual profile will be drawn up based on an established supervisory board profile to ensure alignment with the specific socio-economic and political culture and the social environment of the bank’s main markets.
All Supervisory Board members have committed themselves to fulfill their task as board members to the best of their ability. Their attendance at meetings is being recorded. The board furthermore operates according to a set of rules governing the Supervisory board’s principles and best practices. These have been agreed with by all board members and are published on the internet site of the bank. The remuneration received as supervisory board members is not dependent on the bank’s results.
A programme covering aspects as stated in the banking code has been set up to accommodate for life long learning of Supervisory Board members and such programme will be assessed on an annual basis. A similar assessment will furthermore be performed by an external party at least once every three years.
3. Executive Board (i.e. Managing Board)
The composition of the Executive Board (i.e. Managing Board) of RBS NV is such as to ensure that all business areas and all control and support functions are well represented in the board. The board comprises a Chairman and Chief Risk Officer (“CRO”), a Chief Financial Officer (“CFO”) and a Chief Administrative Officer (“CAO”). To further clarify the specifics of each role in the board and to ensure adherence to agreements made on procedure and governance, a set of rules governing the managing board’s principles and best practices has been agreed.
A programme covering aspects as stated in the banking code has been set up to accommodate for life long learning of Managing Board members and such programme will be assessed on an annual basis.
The Managing Board of RBS NV will continuously ensure a prudent risk appetite, based on the risk appetite framework approved by the Supervisory Board. The Managing Board furthermore takes the interests of all stakeholders (e.g. employees, clients, shareholders) into account in their decision making. Especially duty of care for clients is an important component in doing business.
In line with the requirement of the Banking Code, Managing Board members have taken the banker’s oath; a moral and ethical declaration. Each Board member of RBS NV has signed such declaration.
Please find the text of the declaration below:
"I declare that I will perform my duties as a banker of The Royal Bank of Scotland N.V. with integrity and care. I will carefully consider all the interests involved in The Royal Bank of Scotland N.V., i.e. those of the clients, the shareholders, the employees and the society in which The Royal Bank of Scotland N.V. operates. In this consideration, I will give paramount importance to the client’s interests and inform the client to the best of my ability. I will comply with the laws, regulations and codes of conduct applicable to me as a banker of The Royal Bank of Scotland N.V. I will observe secrecy in respect of matters entrusted to me. I will not abuse my banking knowledge. I will act in an open and assessable manner and I know my responsibility towards society. I will endeavour to maintain and promote confidence in the banking sector. In this way, I will uphold the reputation of the banking profession."
These principles are incorporated into the RBS Group’s code of conduct which is issued to all new employees joining RBS NV.
4. Risk Management
The Managing Board has arranged Risk Management in an adequate manner in order to ensure the Managing Board is aware in good time of any material risks run by the bank and to enable the Managing Board to manage these risks properly. The Chief Risk Officer is a member of the Managing Board. The Managing Board, through its sub committees, the Risk & Control Committee (RCC) and the Asset & Liability Management Committee (ALCo) takes any decision that is of material significance to the risk profile, the capital position or the liquidity impact. Since the 4th quarter of 2013, the former operations of the Risk & Audit Committee have been integrated into the Supervisory Board. Specific provisions have been included in the Rules for the Supervisory Board.
RBS NV has a New Product Approval Process in place to ensure that all products are launched only after careful consideration of the risks and any other relevant factor applicable to such product. Internal Audit checks the New Product Approval Process on design and effectiveness at least once per annum and reports its findings to both the Managing Board and Supervisory Board. To ensure the function’s independence, the Head of RBS NV Internal Audit reports into the Chairman of the Managing Board and the Chairman of the Supervisory Board. RBS NV Internal Audit also reports its opinion and findings on the quality of the control framework, the system of governance and the risk management of the bank to the Supervisory Board on a bi-annual basis and provides the Supervisory Board with their audit review in the remaining quarters of the year. RBS NV Internal Audit furthermore presents their annual audit plan to the Supervisory Board. The Managing Board shall ensure that a systemic audit is conducted of the risks managed in relation to the business activities of the bank. The external auditors are invited to share their findings and opinion concerning the quality and effectiveness of the system of governance, risk management and the banks’ control procedures with the Supervisory Board on a quarterly basis. The external auditors present the annual audit plan to the Supervisory Board and both RBS NV Internal Audit and the external auditors take part in a tri-partite meeting with DNB (from November 2014, ECB as the lead regulator also partake in the meeting) to share their audit plans, analysis and findings at least once per annum. There is a clear escalation process by which the external auditors can raise, with management, any significant concerns.
6. Remuneration Policy
The remuneration policy for RBS Group which is also applicable to RBS NV is a restrained and long-term remuneration policy that is in line with the strategy and risk appetite, objectives and values of RBS Group, taking into account the long-term interests of the group, the relevant international context and society’s acceptance.
In the Annual report for 2015, the adherence including any deviations to the Banking Code will be explained in more detail.
For further information on the Banking Code and RBS NV, please contact:
RBS NV Corprorate Governance & Secretariat
PO Box 12925 (PAC: 17.A.80)
1100 AX Amsterdam
Email to: RBSNVCorporateGovernance&Secretariat@rbs.com