Interview with our ChairmanHow we share value

Supervisory Board Chairman Rob Routs gives his view on Aegon’s progress, and explains why recapitalization of the company’s Dutch business was top of the Board’s agenda last year.

Just as with other listed companies based in the Netherlands, Aegon has a two-tier board structure. What are the most important tasks that the Supervisory Board performs?

The two most important things we do are provide oversight and challenge. That means examining actions management has undertaken in the past, and also looking at what they are planning on doing in the future. At the top of our list, not surprisingly, is the execution of Aegon's strategy – as this determines so much of what happens across the company – in addition to human resources, succession planning and financial performance.

How do you ensure that management focuses on non-financial performance in addition to meeting its financial targets?

The governance system and the codes that we're required to adhere to mean that we have to represent all stakeholders. And by that I mean everyone from policyholders and shareholders to employees and wider society. Something a lot of people outside the financial world may not know is that our regulator requires 50% of the targets we set to be financial and 50% non-financial, such as the Net Promoter Score for customers. These targets are hugely important in terms of determining activity across Aegon's businesses.

How are Supervisory Board members able to get a complete picture of what is happening across the company?

We examine all the strategically important issues that the company faces. Last year, for example, we spent a lot of time discussing the recapitalization of our Dutch business, as it was a key concern for the market and our regulator. On top of meetings with the Management Board, and one-on-one meetings with management, we also have a series of committees that focus on audit, risk, remuneration and nomination & governance matters. This means we're able to really get deep into subjects. At least once a year we meet at one of Aegon's businesses. By doing so, we can speak face to face with local management, and we're always able to pick up the phone and speak to anyone at the company we wish. What's more, if we need additional assistance, we can always get that externally.

We represent all stakeholders, not just shareholders

The professional background of Supervisory Board members has changed during your tenure on the board. Why has this been so important?

For me, it's about having the right combination of experience and expertise. People with different professional backgrounds bring very different perspectives and different ideas. On the Supervisory Board, we have real mix of professional backgrounds – from former CEOs to people with experience in insurance, HR, accounting and the world of politics – and we have very diverse opinions. Until recently, for a company with over 60% of its business in the US, our Board was underrepresented in terms of experience in North America, so that is something that we've addressed through our most recent appointments.

Could you give a flavor of the atmosphere at meetings between the Supervisory Board and the Management Board?

Is there ever any tension? Of course there have been tense moments, and that should always be the case! If the two boards were just to sit around a table, smile at one another and exchange compliments then you're not going to make much progress. Sometimes you have to be tough and challenge why management is operating in a certain way, and on the flipside management has the opportunity to challenge the Supervisory Board as to why we've focused on certain issues. So yes, there is some tension at times. But I call that positive tension, because without it we wouldn't take the company forward.

You're stepping down at the AGM in May 2018 after ten years on the Supervisory Board. Looking back, what are you most pleased with?

Well, it's been a fascinating time, particularly when you consider the journey Aegon has made, from navigating through the financial crisis in 2008 to where it is today. Together we had to make a series of tough decisions, for instance no longer competing in certain markets. These actions have enabled us to create a more flexible, more financially strong and more transparent company that understands its business – and by that I mean how to serve millions of customers around the world. Aegon has a sound strategy and the priority now is to continue to execute.