3 Supervisory Board report

The audit committee prepares the supervision of the Supervisory Board with regard to the functioning of the internal risk management and control systems, compliance with recommendations and the follow-up of the internal audit function and external accountant, the financing of the companies, and the financial reporting and IT.

Items discussed by the audit committee in 2021 included:

• The internal audit plan 2020 (evaluation/progress analysis), the external audit plan 2021 (confirmation) and the internal audit plan 2022.
• The auditing of soft controls, culture and behaviour, and the way the Internal Audit department deals with these issues.
• The monthly and quarterly reports.
• The governance charter, which will be adapted in 2022 to reflect the Yarden takeover and then also include the three lines of defence model related to risk management.
• The report of the annual meeting between DNB, Deloitte and the internal accounting department.
• The annual report and financial statement 2020.
• The accountant’s report for 2020, in the presence of the DELA Group and DELA Belgium accountants.
• The reappointment of Deloitte as accountants for DELA Belgium.
• The development of the post-technical provisions, especially the effects of the premium measures.
• The evaluation of the internal and external processes in the financial statement trajectory.
• The DELA Group business plan for 2022. In view of the Yarden takeover a refinement of the business plan will be included in the spring, including concrete KPIs related to Corporate Social Responsibility (CSR), partly because new regulations require reporting in that field.
• The access security and implementation of IT vulnerability scans and increasing the related budget.
• The progress of IT and the cooperation and alignment between IT and business.
• The verification of customer identity, the processes used and the meetings with DNB on this subject.
• The consequences of the COVID protections on the implementation of services, yields and costs.
• Commercial developments related to free market funerals.
• The sale of crematoriums due to the decision by ACM.
• The meetings of the Executive Board and some employees with DNB.
• The payment process at DELA Germany and internal procedures, including authorisations.
• The sale of crematorium Hasselt (see Executive Board report, ‘Our connections’, under ‘Local presence’).
• Possible acquisitions of funeral companies in Belgium and the related strategy.

The composition of the audit committee is as follows:

• Willemien Caderius van Veen, chair.
• Hans Leenaars.
• Frits van Bree.

Until the appointment of Frits van Bree on 4 September, George de Méris was part of the audit committee. The audit committee met four times, with a 100% attendance by each member.

The risk committee prepares the supervision of the Supervisory Board for the functioning of the internal risk management and control systems, including supervision of compliance with the relevant laws and regulations and applicable codes of conduct, the set-up and effectiveness of the internal risk management system, and the management of the cooperative’s financial and non-financial risks.

Items discussed in the risk committee in 2021 included:

• The status of the internal control at all country organisations (the Netherlands, Belgium and Germany). We discussed the processes, the control systems and the maturity model for internal control in a general sense as well as the development progress made based on the model stages. While there is still a lot to be done, the committee feels that the management and improvements are going well.
• The quarterly risk management reports.
• The risk appetite statements. The risk management policy prescribes that the statements in which DELA determines the risks it is willing to take are evaluated on an annual basis. Two risk appetites were the main focal points of the evaluation in 2021: profit distribution and premium increases. It had already been established in 2020 that the risk appetite statement related to profit distribution had been exceeded. The Executive Board presents the current state of affairs in the ‘Risk management’ section of this report. The risk committee will continue to closely follow developments in 2022.
• The investment policy, including the process to initiate investment proposals and obtain approval, the CSR requirements and restrictions, and the state of affairs related to the dismantlement of the real estate portfolio.
• The assessment of the premium measure by DNB and the related meeting with the Executive Board and employees.
• Developments related to interest rates, inflation and investment performance along with their impact on DELA.
• An extensive evaluation of the dynamic ORSA and changes to the static ORSA.
• Climate risks and the way they are included in the ORSA, including a specific evaluation of the location of real estate in view of rising sea water levels.
• The SFCR 2020.
• The quarterly reports related to tax management.
• The investment exclusion list.
• The investment/participation in the solar-powered vehicle Lightyear, the asset class in which this investment is included, and the process prior to taking on an investment of this type.
• The rating report of Assekurata (DELA Germany) and the process applied.
• The provisions for Yarden policyholders and the consequences and effects thereof for the cooperative, the members and Yarden policyholders in the light of various scenarios related to areas such as inflation, rising funeral costs, profits, interest rates and revenues from the crematoriums and funeral centres sold due to the takeover.
• The Yarden integration plan.
• The quality of risk management at Yarden and staffing of jobs in this field.
• The legal procedures with Yarden franchise holders.
• Tax management, partly related to the Yarden takeover.
• The management of funeral company costs. The risk committee asked the Executive Board to formulate a sharper vision on the multi-year goal, partly related to premium development and solvency, and to ensure a clear demarcation of costs between the cooperative and the funeral company.
• The investments and assets related to ESG (Environmental, Social, and Governance) developments.
• The discontinuation of the Olifant IT project and the subsequent full focus placed on the Dolfijn IT project (see Executive Board report under ‘Our organisation’ for a detailed explanation).
• The processing of personal details and a data leak resulting from human error (which was reported to the Dutch Data Protection Authority (DPA).
• The evaluation of the actuarial function in the presence of advisors from Willis Towers Watson.
• The 'anti money laundering' regulations in Belgium and the process taken in this framework.
• Changes to the risk committee regulations.

The composition of the risk committee is as follows:

• Hans Leenaars, chair.
• Willemien Caderius van Veen.
• Georges de Méris (from 4 September 2021).

Jan Pieter de Pender was a member of the risk committee until his departure as Supervisory Board member on 5 June. The committee met four times, with a 100% attendance by each member.

The remuneration and appointment committee prepares the decisions of the Supervisory Board related to the employer role, such as the assessment and remuneration of the Supervisory Board and Executive Board. The committee monitors the developments of key positions and forms an opinion about the organisational culture.

Items discussed in the committee in 2021 included:

• Prospects related to the composition of the Executive Board.
• The shift in focus by the DELA Executive Board from DELA Netherlands to DELA Group. Jon van Dijk will intensify his activities as CFRO at the group level and no longer be active in the management of DELA Netherlands, where he was also CFO.
• The fleet review and changes to the group management and key functions, including possible development trajectories from the perspective of those involved.
• The growth potential from the organisation to the management and key functions and possibly to the Executive Board, including suggestions on how to improve this potential.
• The phasing out of the management and leadership method ‘result-oriented work’ and the implementation of a new method related to learning and performance management.
• The cultural enrichment programme.
• The remuneration of the Executive Board and the group of managers and key functions (including various analyses, looking ahead and back), the cancellation of variable pay for all functions in DELA Netherlands and providing compensation instead. It was also assessed how desirable and necessary changes are in this regard due to the effect of remuneration goals resulting from the Yarden takeover.
• The experiences of testing a new assessment system in DELA Belgium in which employees and department assess each other. Similar tests are taking place in DELA Netherlands and the IT and Marketing departments.
• The modernisation of the working conditions within Dela Netherlands. These are now in line with DELA’s modern views on employership and desire to be a frontrunner in the labour market in this regard.
• The new pension scheme for new DELA Netherlands employees, which is based on an available premium scheme, including employer contribution, partner pension and further transition plan. While involving a necessary scaling down of the pension, this a good scheme socially speaking.
• The reorganisation resulting from the Yarden integration, the current situation for employees, vacancies and the use of tools for retention.
• The process for appointing Supervisory Board members via the general meeting.
• The process to appoint two new Supervisory Board members and the departure of one new member (see more under ‘Composition of the Supervisory Board’).
• The upcoming benchmark for the remuneration of Supervisory Board members, which takes place every three years. The results were discussed in April 2022.
• The ongoing education for Supervisory Board members, including the need for more internal training.
• The additional functions of Supervisory and Executive Board members, including stimulating the taking on of additional functions outside of DELA in a general sense.
• Suggestions for the ongoing education of members of the general meeting.

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

• John van der Steen, chair.
• Georges de Méris.
• Georgette Fijneman (from 5 February 2022).

The remuneration and appointment committee met four times in 2021, with a 100% attendance from each member.