ANNUAL REPORT 2010   OUR GOVERNANCE  REPORT OF THE SUPERVISORY BOARD 57 SHARPENING OUR FOCUS ■ Capital position and Solvency II ■ Executive remuneration ■ Divestments and restructuring of businesses ■ Governance and sustainability issues ■ Legal and compliance issues Highlights AEGON has been subject to supplemental group  supervision by the Dutch Central Bank since the beginning  of October 2009, in accordance with the requirements of  the European Union’s Financial Conglomerate Directive.  The introduction of new capital requirements under  Solvency II (discussed in the Capital and Liquidity section  of this Annual Report on page 50) was a regular item on  the agenda of meetings of the Board. AEGON’s CFO  presented updates on relevant regulatory and political  developments and on AEGON’s preparations for  Solvency II. The Board scheduled extra meetings with  management, including the senior manager charged with  AEGON’s Solvency II project, to discuss the implications  for the company’s business and products.  As in previous years, AEGON’s capital position was  a key point of focus for the Supervisory Board and  its Risk Committee. In 2010, the company’s capital  position continued to be strong, with excess capital  at EUR 3.8 billion at December 31, 2010. The Board  discussed AEGON’s approach towards sustainability in  general throughout the year. It also discussed specific  issues relevant to AEGON’s businesses and its  stakeholders - for example, customer complaints  and employee engagement.  On February 24, 2010, the Supervisory Board convened  to discuss the results of the fourth quarter of 2009,  which were released on the next day. In March 2010, the  Supervisory Board discussed AEGON’s audited annual  results for 2009. The Board also reviewed and approved  the company’s annual accounts for 2009 and decided to  pay a dividend of 4.25% on the outstanding preferred  shares. At meetings in May, August and November, the  Supervisory Board reviewed AEGON’s first, second and  third quarter results, as well as disclosures on Value of  New Business. At the August meeting, the Supervisory  Board confirmed that no interim dividend will be  declared, in line with the agreement with the European  Commission not to pay a dividend until the core capital  securities obtained from the Dutch State are fully  repurchased. Developments concerning AEGON’s  investment portfolio and impairment levels were also  regularly addressed. During this meeting, management presented three  strategic priorities, which they had identified as crucial  to achieving AEGON’s ambition. During 2010, the Board  also discussed management’s actions and plans to  optimize ONE AEGON. In December, the Board reviewed  and approved the budget for 2011. The Board approved  the 2011 Capital Plan and authorized the Executive Board  to provide for AEGON’s funding needs as budgeted. The Board also had an extensive discussion with local  management in the United Kingdom, who presented  their views on the situation of AEGON UK and their plans  to improve the company’s operations.  The Board and management extensively discussed  AEGON’s strategy, among other matters, at the annual  two-day strategy retreat in Edinburgh, Scotland. During  the two-day meeting the Board considered the changing  environment for insurance companies, as well as  changing customer needs and distribution methods. During the year 2010, one of the key priorities for the  company was to obtain approval from the European  Commission for the core capital received from the Dutch  State in 2008. Management and the Board frequently  discussed developments with regard to this issue. The  process required to obtain clearance proved extensive,  and was concluded in August. The Board agreed with  management to repay EUR 500 million in August 2010  and agreed to repurchased the remainder of the core  capital by the end of June 2011, market conditions  permitting. Full repayment of the core capital received  from the Dutch state remains a priority of the company. Members of the Management Board provided a business  update of their country or unit at each quarterly  Board meeting. During 2010, the Board met with senior  managers from operations around the world: the  United Kingdom, China, India and Brazil and AEGON Asset  Management. The newly appointed heads of Global HR  and Global Sustainability also presented their plans  to the Supervisory Board during the course of the year.  The Board discussed various restructurings and cost  saving initiatives in the light of the strategic priority  to optimize AEGON’s portfolio. The Board supported  management’s decision to explore strategic options for,  among others, the company’s life reinsurance activities.  The Board and management also discussed the  consolidation of the savings banks in Spain and  AEGON’s position as joint venture partner with  some of the Cajas involved.