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GUBERNA Alumni Sparkles - Yvan De Cock

07-05-2021

What does it mean to be an independent director in a regulated environment?

Yvan De Cock is an experienced banker with extensive experience as a director too. Since 2018, he has been an independent director at the Degroof Petercam Bank.  In an interview with GUBERNA Alumni Sparkles, he discusses in greater depth what it means to be an independent director in the regulated banking environment of a differentiated share ownership (that was initially a family one). In addition to the corporate governance rules and company law, a bank must abide to specific regulations and supervision.  He also shares his experience in the specific committee in which he has a seat.  A dynamic board ensures it stays focused due to the diversity of the competences that are available, the self-assessment, constantly keeping track of the environment factors and required knowledge and skills, transparency of the strategy and information and, to conclude, also the preparation for a post-COVID organisation that best conforms to the requirements of customers.

Please introduce yourself and explain the context in which you carry out your mandates?

I’ve had executive jobs during the past 40 years regarding which 34 years in the financial sector. Nowadays, I’m a (non-independent) director at TEB, the Turkish subsidiary of BNP Paribas Fortis, and independent director at the Degroof Petercam Bank where I’m also the chairman of the audit committee and a member of the risk and remuneration committees.

Yvan De Cock

Independent director Bank Degroof Petercam

Contact by e-mail 

Yvan De Cock

What is the difference when you assume the role of director at a bank's subsidiary in an independent family-run business?

Every director has the same remit and that is to achieve the goals of the company. As an independent director, there are specific accents depending on the roles that you assume.

My previous experience as a manager in the financial sector relates to stock exchange listed banks and their branches. These days, at Degroof Petercam, I’m an independent director at a bank that is not listed on the stock exchange that has a diversified share ownership: family shareholders regarding which some are descendants of the founders of the bank 150 years ago, a holding company, financial partners, management and small shareholders. As an independent director, you must pay specific attention to treating all shareholders and possible conflicts of interests equally. The family shareholders also generally have a strong emotional bond with the company in a positive way, but a somewhat more detached perspective on issues by an independent director can sometimes make a useful contribution.

Why did you decide to become a director?

It’s nice to share the knowledge and experience that you have built up and to be appreciated for it. I've also always been motivated to work in new environments on a regular basis and to continuously learn about new things.

What have been your experiences up to now?

At the Degroof Petercam Bank, I'm a director in a company that is not listed on the stock exchange, which, in principle, is not subject to the corporate governance code. As a bank, however, it is subjected to the supervision of the European Central Bank, the National Bank of Belgium and the Financial Services and Markets Authority (FSMA). The rules of these supervisors are even stricter than the corporate governance code and company law put together.

The role of independent director is even more specific than in a non-financial company. For example, a bank has four committees (audit, risk, appointment and remuneration). The supervisory authorities expect the four committees to be chaired by an independent director. This is not required by either the corporate governance code or company law. 

A second example: ECB guidance uses a much broader definition of “conflicts of interests” than the term conflict of interests pertaining to property law as used in company law.

A third example: Before you can become a director at a bank, you must complete a procedure at the regulators to determine whether you have the required reliability and suitable expertise (what is referred to as ‘fit and proper’ in the jargon). Much attention is therefore paid to the selection.

Which impact does the current crisis have on your role as a director?

We are currently busy within the bank with the post-COVID business model and controlling various risks: for example, what is the impact of the accelerated digitisation on customer contact, how is the work being organised, how can we organise and monitor IT security even better, how can we take care of data protection, how can we imbed the fight against money laundering even better in the organisation, the care to offer suitable products and services that match the risk profile of the customer, etc. Indeed, there are quite some topics that deserve special attention.

In relation to IT security, I'm sometimes asked: “How can you feel at home there without being an expert?" Well, by preference, you need to invite an IT responsible person to the board who can explain the jargon in normal language. We have someone like that. Secondly, it is important to have a diversity of competences during board meetings. Nowadays, we have a director with ample experience in IT issues and, in addition, we have set up an IT Commission of which this director is the chairperson. It is not mandatory in banking legislation, but we believed that setting up such a committee was important. This committee gives the Board of Directors the translation regarding what IT is involved in and, for example, gives advice about applications and updates of the IT systems. IT, moreover, is not purely a technical issue. In IT security, for example, managing access rights is very important and this is a purely functional and organisational issue. You don't have to be a technical IT expert to understand that. This is also the case for many other topics such as, for example, data processing.  Diversity in the board is therefore important, but common sense can also contribute much to good decisions and supervision.

In your opinion, which competences and skills are essential to be a good director?

A good director must be highly committed to the company, spend sufficient time on his/her mandate, gain information properly about what is going on at the company and must keep his/her ears to the ground regarding what is going on in the world both within and outside the sector. He/she must also continue to train and the company has the duty of helping the director with regard to this. It is also important in the financial sector to keep well-informed about the evolution of regulations and supervision.

As I've already said, a diversely put together Board of Directors is important. This is demonstrated in the GUBERNA Board Dynamics training programme when participants learn how a Board can operate well including during crisis conditions. Short and transparent communication lines, availability and collegiality are essential conditions to ensure the board works well.

Based on your experience, have you also been involved in corporate leadership as well as board mandates? What makes an excellent director for a company?

In addition to the previously listed properties of commitment, permanent learning and observation of what is happening in the world, it is important that there is independence in thought and action: you must dare to express your opinion and engage with the confrontation with different opinions. This is required to ensure a good deliberation process is achieved to arrive at the best possible decision.

 If we want to appoint a new director at our bank, we analyse the competences that we have and the competences that we expect from a new director. We also perform a self- assessment each year to determine which competences are insufficiently represented.

The added value of a self-assessment based on an extensive list of questions is that it makes you think critically about your own role in the board. You could, after all, believe that you already know everything. If you then receive a specific questionnaire, you are obliged to think carefully and determine what you can do even better or learn.

Our self-assessment starts with self-reflection regarding your own performance and is expanded with 180° of feedback from the other directors. We believe that we should have competences at our bank that fit in with our four strategic activities and are part of both technical competences and soft skills.

You must therefore not just try and be an excellent director, but be excellent as a collegial board with regard to competence complementarity.

What do you see as your specific added value for a board?

As an independent director, I can help the other directors and management determine the right strategy based on my experience in the sector. I don't do this via a "I know it all" mindset but through a constructive dialogue where I focus attention on observed tendencies and new developments. I can, furthermore, point to best practices with regard to general management, risk management and compliance.

I’m also the chairman of the audit committee that has two important mandates. The first mandate is to monitor the integrity of the financial statements and give advice regarding this to the board that, in turn, will provide advice to the General Meeting. It is an important duty and sometimes slightly technical. Secondly, we are involved in the supervision of the correct organisation of risk management. We call this the ‘third line of defence’ in the banking world: The operational departments take care of the first line of defence, the risk department is in charge of the second one and the internal audit takes care of the third one. I'm also a member of the risk committee and therefore I can also easily make the link to the second line of defence to ensure all risks are identified and correctly controlled.

As the chairman of the audit committee, my contact with the person responsible for the internal audit, the external auditor and the regulators is good. They can also point out to me specific focus points regarding the accounts or risk management.

To conclude, I'm also a member of the remuneration committee. This must not just ensure correct management pay, but also a payment system that promotes healthy risk management. In this sense, I can make suitable recommendations together with the chairman of the risk committee based on what we have seen and discussed in those two committees.

Which themes deserve full attention in the boardroom?

In finance in the broadest sense, i.e. with regard to insurers, accountants, civil-law notaries, banks etc., compliance is very important and, in particular, in the fight against money laundering.  It is not enough that you know your customers (or think you know them), you must be able to document this and policies and processes must be clear and transparent. We have had to spend more attention on this the last year. You also need to install the tools such as to detect and try to prevent potential money laundering transactions. It is key that a culture is realised among employees so that they accept the importance of this topic and act accordingly.

In addition, there are other important topics that do not just need to be on the agenda of the boards of directors or management bodies in the financial sector, but in all sectors such as digitisation, cybersecurity, corporate social responsibility, customer protection, data protection, outsourcing, etc.

Do you have any tips for (future) members of the board?

By going from an operational position to a board position, you need more in-depth knowledge in relation to other issues than the operational ones. Especially when you know the sector inside out, it is possible that you may start to tell management how they must solve or treat some question or another. You are allowed to make suggestions, but you must certainly ensure you do not impose your opinion. The director's role is more strategic. As a director, you help define the strategy based on management proposals. When you no longer have an executive position, you have the advantage that you can spend more time on strategic questions and this means that you can truly give added value to management together with the other directors.

How did the GUBERNA training programmes contribute towards your success as a director?

We already had a close partnership with GUBERNA with BNP Paribas Fortis to train employees in the mandates of a director. We have also called upon the GUBERNA training programmes at Degroof Petercam. These training programmes have been greatly appreciated and have meant that the competences for a good board have been refined and strengthened.

How does the GUBERNA Alumni network support you in your role of director?

Through the network that I have built up I can always find a contact in an area of expertise or as someone who will help me reflect to ensure I can take care of such a directorship. This is what I'm currently continuing by, for example, being a part of the GUBERNA Alumni association.

About the interviewer

Interview conducted by Chris Wouters – GUBERNA Certified Director

Business Partner and Advisor

Tel +32 477 666 083

Contact by e-mail  

Chris Wouters

Want to contribute to GUBERNA Alumni Sparkles?

To encourage the exchange of experiences and knowledge, the GUBERNA Alumni have launched an interview series: GUBERNA Alumni Sparkles. Through the stories of experienced directors, we want to inspire our members.

Would you like to contribute to GUBERNA Alumni Sparkles or do you have suggestions for interviewees or topics? Please send an email to Danny Vandevyver.