The Critical Role of Compliance in the Boardroom Kevin Knightly CEO, Rabobank Ireland

1. 5th Compliance in Finance Conference The Critical Role of Compliance in the BoardroomKevin KnightlyCEO, Rabobank Ireland 14th November 2011

2. Rabobank at a Glance Results 2011-I • Cooperative bank established in 1898 Standard & Poor’s AAA • All-finance leader in domestic market Moody’s Investor Service Aaa • Global food & agribusiness bank Fitch AA+ DBRS AAA June 2011 Dec. 2010 June 2010 • Total assets (€bn) 665.0 652.5 675.6 • Group equity (€bn) 42.5 40.8 40.2 • Tier 1-ratio 16.2% 15.7% 14.8% • CoreTier 1-ratio 12.7% 12.6% 11.8% • Equity Capital Ratio 14.0% 14.2% 13.4% 2011-I 2010-I • Net profit (€mn) 1,854 1,639 • Net profit growth +13% +25% • Return on equity 10.8% 10.2% • Efficiency ratio 59.7% 60.7%

3. Structure and StrategyMembers and local cooperatives basis of Rabobank • 1.8 million members of local Rabobank cooperatives • Non-financial membership: no entry fee, no dividend • Members buy 4 products on average, compared to 2.5 by non member clients • Limited say on business strategy of local Rabobank via Members Council • Exclusive right (not an obligation) to buy Member Certificates 10 million clients 1.8 million members 141 local cooperative Rabobanks 911 domestic branches ownership andcross-Guarantee Rabobank Nederland division: Rabobank International asset management, real estate, leasing, mortgages, private banking specialised subsidiaries

4. After 115 years of making profits and not paying dividends 2010 net profit €2,772 mn

5. Cooperative governance in 2011Group governance 1.8 mnmembers Local Member Bank Local Member Bank Local Member Bank Local Member Bank Local Member Bank Local Member Bank 141 memberbanks 2 delegates per bank: 1 member, 1 manager Regional Delegates Assembly Regional Delegates Assembly Regional Delegates Assembly 12 regionassemblies meet every 3 months 6 delegates : 4 members, 2 managers Central Delegates Assembly Central DelegatesAssembly 72 delegates (48 members, 24 managers) meet every 3 months General Assembly annualrepresentation of 141 memberbanks 10,000 votesdividedaccording to size General Assembly

6. Conclusion • The cooperative nature of Rabobank essentially did not change in 115 years • and that nature is the basis for: • a conservative strategy • a modest and selective growth • a modest target for return on equity • strong focus on long-term performance • strong capitalisation as the highest priority • the highest possible level of creditworthiness • The governance structure underpins business philosophy

7. Rabobank Ireland Plc. • Established in August 1994 • Subsidiary of Rabobank Nederland • A number of related and sister companies operating in Ireland • Focus on Food & Agri and renewable energy • Corporate Banking and Treasury • Benefits from parent company AAA rating • Continues to be profitable

8. ACC Bank • Originally established in 1927 as Agricultural Credit Corporation. • Acquired by Rabobank Feb 2002. • Heavily loss making due to exposure to Property and Construction

9. Mission of the Compliance Function of the Rabobank Group “To promote and monitor the integrity and related reputation of the Rabobank Group”

10. Compliance Charter • Primary Task of the compliance function is to support the Executive Board and the management of the business in fulfilling their responsibility for compliance • Compliance starts at the top • Compliance is an integral part of the organisation’s culture • Compliance is totally independent • Compliance is a strategic business issue

11. Basic Principles of Compliance • Integrity and reputation are the core assets of the Rabobank Group • Management is the owner of compliance • Management must lead by example • Compliance requires each employee’s attention • An effective compliance organisation exists at all levels • All Group entities adhere to the compliance policy • Deal with the regulatory authorities in an open an cooperative manner • Conduct business in a manner that is in line with true ethical and social values

12. Responsibilities of the Boards of Directors and Senior Management • Supervisory Board • Responsible for overseeing the management of Rabobank’s compliance risk, irrespective of whether it outsources compliance activities • Approves Rabobank’s Compliance Charter and Compliance Policy • Supervisory Board evaluates at least annually, the extent to which Rabobank effectively manages compliance risk

13. Responsibilities of the Boards of Directors and Senior Management • Executive Board • Responsible for effectively managing Rabobank’s compliance risk, irrespective of whether it outsources compliance activities and establishing Rabobank’s Compliance Charter • Responsible for instituting a permanent and effective compliance function within Rabobank as a component of the compliance policy • Establishes the compliance policy and communicates this throughout the organisation • Ensures the compliance policy is observed by allocating responsibilities in such a way that action is taken if breaches are identified, and by ensuring that appropriate measures are taken in case of non-compliance • At least annually, must identify the compliance risks that could threaten Rabobank and assess the plans to manage them • Annually report to the Supervisory Board regarding the way Rabobank manages compliance risk • Must immediately report every material breach of laws and regulations, and internal standards to the Supervisory Board

14. Responsibilities of the Boards of Directors and Senior Management • Management • Must ensure that the activities of their unit comply with the relevant regulations of the legislature, regulators and supervisory authorities • Lead by example through personal commitment regarding the consistent adherence to Rabobank’s integrity and compliance standards • To be conscious of the implications of laws and regulations, supervisory rules, worldwide banking compliance standards and the Rabobank compliance policy • To identify which areas require additional guidance in order to prevent reputational damage • To ensure all employees are made aware of their responsibility for compliance in their areas of work • To ensure proper communication and promotion of all applicable laws and regulations, supervisory rules, worldwide banking compliance standards and the Rabobank compliance policy

15. Responsibilities of the Boards of Directors and Senior Management • Management (Cont’d) • To implement procedures designed to prevent breaches of and violations of applicable laws, regulations and policy, and to ensure observance of these procedures • To oversee and monitor employee’s activities in order to identify errors or improper conduct in a prompt manner • To ensure that all employees are provided with proper training and education to ensure that they remain up to date of the most recent applicable laws and regulations and of Rabobank Group policy • To respond immediately to every indication of breach of laws, regulations or other rules and to launch an investigation immediately in the case of improper conduct on the part of employees • To ensure that in the case of business activities in different jurisdictions (e.g., commercial activities and support functions) are located in different jurisdictions, explicit agreements are made regarding the supervision of these activities

16. Rabobank applies an Embedded Approach - Compliance with the spirit of regulation (i.e. with best practice) • Tone from the top • Good corporate citizen • Embedded culture of compliance • Compliance feeding into Rabobank operations is seen as positive • A holistic approach to risk management • Better publicity is a possibility • Lower cost of disputes/fines • Lower likelihood and impact from regulatory sanctions

17. Key Principles for Rabobank to Deliver Client Value • Respect • Respect, appreciation and involvement form the basis of the way in which the people of Rabobank work together • Integrity • The Rabobank group strives to be honest, sincere and trustworthy in all its activities • Professionalism • The Rabobank Group serves its clients with valuable expertise and facilities • Sustainability • The Rabobank Group aims to contribute to the sustainable development of Society in economic, social and ecological terms

18. Why is Rabobank different? • Culture - Culture – Culture • Embedded cooperative culture developed over 115 years • Strong focus on Corporate and Social Responsibility • Prudent • Conservative • Controlling from Head Office • Worldwide application of Group Standards and Policies across the Rabobank Group • Preservation of reputation • Preservation of highest possible credit standing