Supervisory Board activities
FMO's Supervisory Board and its committees work through regular,
pre-scheduled meetings, and on an ad hoc basis throughout the
A transparent formal reporting structure is in place, and
Supervisory Board members are frequently in contact with the
Management Board so they remain fully informed and can provide
advice at all times. The Supervisory Board Chairman meets the CEO
informally once a month. With the exception of evaluations and
appraisals, the full Management Board meets the full Supervisory
Board at all pre-scheduled meetings.
The Supervisory Board held four regular meetings and two
strategic sessions in 2011. The Supervisory Board is careful to
ensure the right balance between governance and performance, so
that it devotes attention not just to governance matters, but also
to strategic and business issues. The attendance at the regular
meetings was 100%.
Last year, explicit attention was devoted to capital management
and growth. In particular, the Supervisory Board looked at capital
requirements, solvency risks and their implications for FMO's
operations. Good profitability is essential to enable FMO to
continue growing its portfolio and annual investment volumes.
The Supervisory Board looked closely at the financial risks to
which FMO is exposed: liquidity; financing and private equity
exits; capital structure and funding; and third-party funds. The
Board was satisfied that although the market turmoil requires
constant vigilance, FMO is very healthy in all these areas.
The Supervisory Board was highly involved in the preliminary
work done last year to develop FMO's new strategy for 2013-2016.
The bank reaffirmed its mission to fight poverty in developing
countries through providing sustainable finance in sectors that
have the potential for high development impact. FMO does this by
providing finance and knowledge to entrepreneurs in developing
The Supervisory Board has asked the Management Board to develop
concrete strategic targets in areas such as development impact,
loan production, organizational developments and funding. It should
be noted that the strategic reassessment on which FMO is working
will not lead to a higher risk profile for the bank; very high-risk
investments will only be possible if third parties assume some or
much of the risk. In this respect, FMO received a great deal of
support from the Dutch government in 2011, for example through the
funds which FMO manages for the Dutch State.
Last year close attention was also paid to FMO's financial
reporting and financial risks, determining the organization's risk
appetite, policies and risk framework. The Risk Management
department and the Supervisory Board's Audit & Risk Committee
monitor to ensure adherence to these parameters.
The functioning of monitoring systems was also looked at.
Ensuring that FMO is fully compliant with national and
international rules and regulations, and that internal controls
function correctly, is a major focus area of both the Management
Board and the Supervisory Board.
When it comes to engaging with stakeholder the Supervisory Board
members are also actively involved. For example, the chairman of
the Supervisory Board holds annual meetings with the Dutch Ministry
of Finance, and the Supervisory Board had two meetings in 2011 with
the Dutch Ministry of Foreign Affairs/Development Cooperation.
As regards internal stakeholders, the Supervisory Board holds
formal meetings twice a year with the FMO Works' Council. The
Supervisory Board intends to work towards more structured
interaction with FMO's management.