Governance structure

AEGON has a strong culture of risk management, based on a clear, well-defined governance framework. The goals of this framework are as follows:

• To minimize ambiguity by clearly defining responsibilities and escalation procedures for decision makers
• To institute a proper system of checks and balances by ensuring that senior management is aware at all times of material risk exposure
• To manage concentration by avoiding the threat of insolvency from an over-concentration of risk in particular areas
• To facilitate diversification by enabling management to identify diversification benefits from apparent risk-return trade-offs
• To reassure external constituencies that AEGON has appropriate risk management structures and controls in place.

Governance structure

AEGON's risk management framework is represented across all levels of the organization. This ensures a coherent and integrated approach to risk management throughout the company. Similarly, AEGON has a number of company-wide risk policies in place, which detail specific operating guidelines and limits. These policies are designed to keep overall risk-specific exposures to a manageable level. Breaches of policy limits or warning levels trigger immediate remedial action or heightened monitoring. Further risk policies may be developed at a local level to cover situations specific to particular country or business units.

AEGON's risk management governance structure has four basic layers:

• The Supervisory Board (and the Supervisory Board Risk Committee)
• The Executive Board
• AEGON's Group Risk and Capital Committee (GRCC)
• Individual Risk and Capital Committees (RCCs) present in AEGON's operating units.