3 Statement by the Supervisory Board

The Supervisory Board hereby presents the annual report, which includes statements from the Executive Board and Supervisory Board as well as the financial statement.

The statement from the Executive Board was drawn up by the Board and discussed with the Supervisory Board. The financial statement was audited by the external accountant and approved in the audit statement. The Supervisory Board confirms the financial statement.

In the year under review the Supervisory Board was mainly focused on the impact of the pandemic and on the planned takeover of Yarden. There were also meetings about progress in the change calendar and the internal control process.

The tasks and responsibilities of the Supervisory Board comprise supervising the Executive Board and the general course of affairs in the cooperative and its associated companies. In addition, the Supervisory Board provides the Executive Board with advice, weighing all the relevant interests, including those of its members and employees. In addition to its supervisory and advisory role, the Supervisory Board functions as the employer of the Executive Board members. All members also act as the Supervisory Board of DELA Holding NV and of DELA Natura- en levensverzekeringen NV.

Supervisory and advisory role

The Supervisory Board was kept regularly informed during 2020, about the realisation of the cooperative goals, strategy and risks related to the company activities, the setup and functioning of internal risk management and control systems, the financial reporting process, compliance with legislation and regulations, the turnover and cost developments, investments, the IT projects and change agenda, and the risk policy. The Supervisory Board assessed whether the capital allocation, investment policy and liquidity position were in line with the risk appetite at a strategic level. The Supervisory Board found that the risk appetite with regard to profit distribution had been exceeded and discussed the matter with the Executive Board which indicated that it would review the Risk Appetite Statements.

Supervisory Board as employer

The Supervisory Board evaluates the functioning of the Executive Board members at least once a year, as was the case in 2020.

It also supervises the policy of the Executive Board with regard to the selection criteria and appointment procedure for senior management. In 2020, the Supervisory Board in its employer role discussed the Executive Board’s evaluation of the management of the independent company segments and the direct reports under the Executive Board.

The variable remuneration for the Executive Board is determined based on financial and non-financial result-oriented agreements derived from DELA’s long-term strategy, risk appetite, multi-year goals and annual plan. Based on the performance of the Executive Board in 2020, the remuneration and appointment committee proposed that the Supervisory Board award a variable remuneration.

Changes to the Supervisory Board

One member stepped down in 2020 when Corjo Jansen said goodbye in June at the general meeting and was thanked by all present for his contribution to the cooperative. As Corjo was no longer able to serve as a Supervisory Board member due to his academic activities, he decided not to put himself up for reappointment. His role as vice chair was filled by Hans Leenaars as of 6 June and the Supervisory Board still has one vacancy.

The composition of the Supervisory Board is otherwise unchanged and detailed in the segment ‘In brief’ under ‘Personal details of Supervisory Board’.

Functioning and evaluation of the Supervisory Board

The Supervisory Board agrees with the principle that the composition of its members should be such that they are able to be critical and act independently from each other, the Executive Board and any specific interests. DELA’s Supervisory Board aims for a well-balanced and diverse composition.

The Supervisory Board discusses its own functioning at least once a year and once every three years with independent external support. The latter was the case in 2018 while in 2020 only an internal evaluation took place. The reference framework of the evaluation is based on the Dutch Code of Conduct for Insurers as well as prevailing insights into good governance. The Supervisory Board feels that it is functioning effectively and, with its current composition, can guarantee a sufficient level of knowledge, experience and competence. Moreover, the general notion is that its composition is complementary and pluriform. When filling the current vacancy in the Supervisory Board the members will try to establish a more balanced male/female ratio. The Supervisory Board uses a profile to ensure a proper composition and every year reassesses whether the profile is still in line with the current and future tasks and interests of the Supervisory Board.

During the reporting year, the Supervisory Board supervised and presented advice to the Executive Board on a continuous basis.

In 2020, it held six regular meetings and two extra meetings devoted to the proposed takeover of Yarden. The attendance was 100% for all members.

As usual, there were two regular general meetings. The 'Executive Board report’ segment describes the topics discussed in the general meetings in the ‘By and for members’ section.

There was regular contact between the Supervisory Board chair and Executive Board chair throughout the year. The Supervisory Board met twice with the confidential committee. All five members have individually attended one or more meetings of the Dutch works council.

The Supervisory Board supervised the general policy of DELA and its associated companies in the Netherlands, Belgium and Germany. The developments in the field of risk management and IT and the activities and results of capital management were recurring topics. As is the case every year, the Own Risk and Solvency Assessment (ORSA) and capital policywere on the agenda in December. The Supervisory Board discussed the business model in relation to the profit distribution code, including the consequences of a negative interest rate and the functioning of the premium measure method. The governance charter and the profiles of the Supervisory Board members were adapted, and the Executive Board regulations updated and approved. The regulations of the Supervisory Board and committees were also evaluated and confirmed.

Audit committee

The audit committee supports the Supervisory Board in supervising the activities of the Executive Board in areas such as financial reporting, internal risk management and IT.

Among other items, it discussed the 2019 report from the external accountant, the 2019 financial statement, the cost price model (BGFO3), the external audit plan for 2019 and access management of the IT applications. The audit committee approved the audit plan for 2020, including the prioritisation of the top 20 internal audit topics. It held meetings with the internal and external accountants regarding the Solvency II / QRT audit, and welcomed presentations by the tax manager and innovation manager.

The composition of the audit committee is as follows:

• Willemien Caderius van Veen, chair;
• Hans Leenaars;
• Georges de Méris.

There were no changes to this composition in 2020. The audit committee met four times, with a 100% attendance from each member.

Risk committee

The risk committee was separated from the audit committee in 2019 in order that it could focus on supervising the risk policy and management, including risks related to the remuneration policy, in a more specialised way. And this was indeed the case in 2020. Subjects discussed by the committee included developments related to the pandemic, periodical reports from those responsible for the actuarial function, compliance risk, financial risk and operational risk, strengthening internal control, risks related to the possible takeover of Yarden, risk aspects of the variable remuneration, volatile developments on the financial markets and, in the same framework, the risk coverage of the investment portfolio (including via the tail risk hedge), the core capital and technical provisions (including the related shifts therein) and the Dolphin project. An evaluation was made of the second line risk management and the actuarial function. The risk management policy says that the statements in which DELA determines which risks it is willing to take (risk-appetite statements) should be annually evaluated. This evaluation also took place. One session focused on the process of corporate social investments, including the exclusion policy, integration of the ESG analysis in the investment process and impact investing. In 2020 DELA adopted a policy in which the organisation aims for a 50% reduction in the CO2 intensity of the share portfolio; a decision that was embraced by the full Supervisory Board. DELA has been monitoring and modelling the emissions of companies in which it has shares for some time. This criterium was solidly embedded in the portfolio strategy during 2020.

The composition of the risk committee is as follows:

• Hans Leenaars, chair
• Willemien Caderius van Veen
• Jan Pieter de Pender.

There were no changes to this composition in 2020. The committee met four times, with a 100% attendance from each member.

Remuneration and appointment committee

The remuneration and appointment committee supports the Supervisory Board in preparing decisions about issues such as the composition and (re)appointment to the Supervisory Board and Executive Board. It carries out the same task related to the remuneration of the Executive Board, and the remuneration policy of the company. The committee monitors the evaluation of top management and the key positions by the Board.

Among the items discussed in 2020 were the remuneration policy, including related deviations in Belgium and Germany, wage categories, risk analyses, variable remuneration (looking both back and fowards into the future), the assessment and remuneration of the Board and executive team, the additional functions of the Board, the remuneration and additional functions of the Supervisory Board, items in the regulations focused on the remuneration policy, the future perspective for the Board composition (succession planning), the diversity plan, training and pensions.

The composition of the remuneration and appointment committee is as follows:

• John van der Steen, chair;
• Corjo Jansen (until 6 June 2020);
• Georges de Méris.

The remuneration and appointment committee met three times in 2020, with a 100% attendance from each member.

The members of the Supervisory Board held two internal education sessions in 2020, aimed at updating and increasing the members’ expertise where necessary. The first session was held in June and had as theme the cost allocation, internally known as project 3D. The second session took place in November, and focused on DELA’s business model in the context of the extremely low interest rate. Items discussed included internal aspects, such as the mechanism of the coverage level and profit distribution, and external aspects, including price elasticity and the competitive position. Both sessions were seen as valuable and resulted in new insights. The sessions were plenary and all members of the Supervisory Board took part.

In accordance with the statutes of DELA Coöperatie UA, the Supervisory Board has processed the annual report and financial statement of DELA Coöperatie UA and approved the supplemented data. The Supervisory Board discussed the documents with the Executive Board, the internal accountant and the external accountant (Deloitte), and was informed about Deloitte’s approved audit statement for the 2020 DELA Coöperatie UA financial statement. The Supervisory Board proposes that the general meeting confirm the 2020 financial statement of DELA Coöperatie UA and grant the members of the Executive Board discharge for the applied policy in the reporting year. We also propose the general meeting grants the members of the Supervisory Board discharge for their supervision.

The Supervisory Board would like to thank Corjo Jansen for his eight-year contribution as a member to the development of the cooperative, including as vice chair.

In addition, the Supervisory Board thanks all members and other customers for their confidence in DELA. A special word of gratitude goes to DELA employees for their hard work and dedication during the COVID pandemic. In a year of trials and tribulations, they represented the values of DELA in an exceptional way despite the restrictions and constant changes. The Supervisory Board understands just how much of a challenge this has been at times and the many examples of solidarity shown by the organisation make us both proud and grateful.

Eindhoven, 7 May 2021

Supervisory Board

J.W.T. van der Steen, chair
Prof. J.J.A. Leenaars RA, vice-chair
J.P. de Pender, secretary
W.A.P. J. Caderius van Veen
RA G.H.C. de Méris RA FCA