ABN AMRO Bank N.V. (ABN AMRO Bank) currently has five subsidiaries with a banking license granted by the Dutch Central Bank (DNB):  ABN AMRO Groenbank B.V. (Groenbank), ABN AMRO Hypotheken Groep B.V. (AAHG), Direktbank N.V. (Direktbank), ABN AMRO Clearing Bank N.V. (AACB) and International Card Services B.V. (ICS). These subsidiaries are hereafter referred to as the “Dutch bank subsidiaries”.

ABN AMRO applies the principles of the Dutch Banking Code to all Dutch bank subsidiaries within its group of companies on a consolidated basis. As such, ABN AMRO has designed group wide policies and standards to ensure that the requirements of and intentions behind the Dutch Banking Code are adhered to in all relevant parts of the organisation. Considering the varying business activities, organisations and risk frameworks of the Dutch bank subsidiaries, the actual implementation of the group-wide policies and standards may differ between the subsidiaries. The manner in which the group-wide policies and standards designed to ensure compliance with the Dutch Banking Code are implemented within the relevant subsidiaries is outlined below for each of the sections in the Code. The text is frequently updated to reflect the ongoing efforts of ABN AMRO in ensuring that the principles of the Code apply to its full group of companies.

Supervisory Boards of subsidiaries

All subsidiaries have a Supervisory Board. Each Supervisory Board has a number of members as is sufficient for the proper performance if its duties. The number of members varies from three to five, depending on the nature, size and complexity of the subsidiary. Each Supervisory Board consists of members of ABN AMRO’s management. Depending on the nature of the subsidiary, different business units and functions of ABN AMRO are represented in the Supervisory Board, such as Risk, Finance and Sustainability. Each Supervisory Board as a whole possesses sufficient knowledge, expertise and experience to adequately perform its duties.

All members of the Supervisory Boards of the subsidiaries are employed by ABN AMRO Bank and do not receive separate compensation as Supervisory Board member. Furthermore, candidates are generally appointed in the supervisory board on the basis of their position within ABN AMRO. ABN AMRO is currently implementing the requirements of DNB and the Financial Markets Authority (AFM) with regard to the expertise of board members and in this respect also assesses whether it is desirable to draw up profiles related to the composition and expertise of the Supervisory Boards at subsidiary level. Also,, a dedicated lifelong learning programme for ABN AMRO’s senior management and members of the managing and supervisory boards of subsidiaries has been put in place. Since the subsidiaries are an integral part of the ABN AMRO organisation and all members of the Supervisory Boards are members of ABN AMRO’s management, these members of management are assessed annually by ABN AMRO on, amongst other things, leadership qualities. As part of the implementation of the DNB and AFM requirements with regard to the expertise of board members, ABN AMRO is currently assessing whether a self-evaluation should be organised at subsidiary level.

Managing Boards of subsidiaries

The Managing Board of each subsidiary has a number of members as is sufficient for the proper performance of its duties. The number of members varies from two to five, depending on the nature, size and complexity of the subsidiary. Each Managing Board as a whole possesses sufficient knowledge, expertise and experience to adequately perform its duties. All members possess thorough knowledge of, among other things, the financial sector, the banking sector, the bank’s functions in society and the risks involved in the business of the subsidiary.

In discharging its duties, each Managing Board is guided by the interests and continuity of the subsidiary and the business connected with it, as well as the interests of ABN AMRO as a whole. In so doing the Managing Board makes a balanced assessment of the relevant interests of clients and all other stakeholders. Subsidiaries have an independent duty to maintain a continued focus on the client’s interest and to give substance to the duty of care towards clients, and are required to do so within the framework set by ABN AMRO for putting the client’s interest first.

All members of the Managing Boards signed the Declaration of Moral and Ethical Conduct recommended in the Banking Code. Translation of this declaration into ABN AMRO’s Business Principles that form guidelines for the behaviour of all employees is organised at group level. Where employees are not governed by an employment contract with ABN AMRO Bank (as is the case at AAHG and ICS), ABN AMRO’s Business Principles will specifically be adopted by these subsidaries.

The dedicated lifelong learning programme for ABN AMRO’s senior management ensures that all supervisory board members continue to meet the requirements of DNB and AFM with regard to the expertise of board members.  As part of the ongoing implementation of these requirements ABN AMRO will determine whether the yearly assessment of the board member’s expertise shall be made at group level or by the supervisory board of the subsidiary.

Risk management at subsidiaries

ABN AMRO applies the Banking Code’s principles on risk appetite, risk policy and risk management on a consolidated basis. The Supervisory Board of ABN AMRO Bank approves the risk appetite of the entire group and assesses periodically at a strategic level whether the commercial activities of the relevant subsidiary are appropriate in the context of the risk appetite. Furthermore, the Managing Board of ABN AMRO Bank and its Chief Risk Officer are also responsible for the risk policy at subsidiary level. Consequently, not all subsidiaries have installed separate risk committees of the Supervisory Board or appointed Chief Risk Officers in the Managing Board.

Notwithstanding the group’s policy on risk appetite, risk policy and risk management, subsidiaries have an independent responsibility with respect to risk. The Supervisory Boards of subsidiaries pay special attention to the subsidiary’s risk management, which fits within the framework set at group level. Furthermore, the Managing Boards ensure a balanced assessment between the commercial interests of the subsidiary and the risks to be taken, taking into account the risk appetite set at group level. In this respect it should be noted that ABN AMRO has a comprehensive product approval and evaluation process in place. All new products of subsidiaries go through this process or a similar process at the level of the subsidiary which complies with the group-wide policy.

Audit at subsidiaries

ABN AMRO ensures at group level that systematic audits are conducted of the management of risks related to the subsidiaries’ business activities. Within the ABN AMRO Group, Group Audit and the external accountant are responsible for auditing the entire group. Group Audit, the external accountant and the Risk & Capital Committee of ABN AMRO Bank regularly consult and discuss important findings regarding subsidiaries at group level. Under the three lines of defence model, subsidiaries independently apply the Banking Code’s principles on audit where necessary.

Remuneration policy at subsidiaries

With the exception of AAHG and ICS, employees and Managing Board members of subsidiaries have an employment contract with ABN AMRO Bank and fall under the scope of ABN AMRO’s remuneration policy for senior management or ABN AMRO’s collective labour agreement.

ICS employees are governed by an employment contract and collective labour agreement at subsidiary level whereas AAHG applies the ABN AMRO collective labour agreement. All managing board members of AAHG and ICS fall under the scope of ABN AMRO’s remuneration policy for the senior management or ABN AMRO’s collective labour agreement.