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Dutch Corporate Governance Code

The Dutch Corporate Governance Code (‘the Code’) only applies to organisations whose shares are listed on a regulated market. Even though Triodos Bank’s depository receipts are not listed on any regulated market it chooses to endorse and comply with the principles and best practices of the Code. The full comply-or-explain statement as required under the Code can be accessed on our website.

Although Triodos Bank generally complies with the principles and best practices of the Code, it has opted to consciously differ from it in several specific instances.

The first deviation relates to voting rights on shares. To secure the continuity of Triodos Bank’s mission and objectives, depository receipt holders cannot exercise voting rights on the underlying shares. Instead these rights are exercised by The Foundation for the Administration of Triodos Bank Shares (SAAT). For the same reason, depository receipt holders cannot make recommendations for appointments of members of the Board of SAAT.

The second instance relates to the term of office for Statutory Directors. This term is not limited to a period of four years, because Triodos Bank feels that this would not serve the long term development of the organisation.

Triodos Bank also differs from the best practice stating that a person may be appointed to the Supervisory Board for a maximum of three, four-year terms, as its articles of association allow the General Meeting to re-appoint a member of the Supervisory Board due to special circumstances after his or her maximum number of terms has been completed. The objective of this provision is to create extra time and space for the Supervisory Board to fill vacancies.

The fourth instance concerns the fact that, for practical reasons, Triodos Bank has adopted a modified regime for conflicts of interest relating to cases in which it intends to enter into a transaction with a legal entity in which an Executive Board member has a management or supervisory position. If such a conflict of interest concerns a legal entity outside the Triodos Group, and is of material importance to it, the adapted regime provides for checks and balances (e.g. through the involvement of the Supervisory Board’s Audit and Risk Committee) and ensures adequate transparency. If such a conflict of interest regards a legal entity within the Triodos Group no rules will apply. This is in accordance with the latest developments in regulation and case law. To other (personal) conflicts of interest of Executive Board members (as defined in best practice II.3.2 sub i) and ii) of the Code) the provisions of the Code are applicable.

The fifth instance relates to the fact that the Supervisory Board of Triodos Bank does not have separate nomination and remuneration committees, but rather operates an integrated Nomination and Compensation Committee. This is done for practical reasons, given Triodos Bank’s relatively modest size.

Triodos Bank also differs from the Code’s best practice when submitting all proposals to the Annual General Meeting of Shareholders for material amendments to the Articles of Association as separate agenda items. For practical reasons Triodos Bank wants to retain the possibility, at the discretion of the Executive Board and the Supervisory Board, to submit a proposal for multiple amendments to the Articles of Association as one single agenda item when there is a strong degree of interrelatedness between these proposed amendments.

Finally, as it does not have any share plans or option schemes in place, several Code provisions regarding executive remuneration do not apply to Triodos Bank. The total costs for executive remuneration, which primarily consist of wages and pension elements, are published in Note 28. Co-worker and other administrative expenses.