Chairman's message

Dear shareholders and other stakeholders,

I hope that you will agree with me that Covid-19 was a defining feature of 2020. In more ways than one, it forced us all to confront the fragility and realities of life. 

We have had a reasonably good year financially, notwithstanding the market dislocations and limitations placed upon us by the pandemic. Our investments over the last several years in technology – particularly our omni-channel service model and other forms of digitalisation – have allowed us to serve our clients well and be there for them in their times of need. We believe that dedication to clients and catering to their needs is and has been a defining feature for us. We were well rewarded by our clients, as evidenced by the growth in assets under management. We are very grateful to our clients for the trust they have placed in us. 

We do not know what 2021 will bring, but I want to assure our clients that we will be there for them – regardless of the circumstances. On behalf of the firm, I would like to express my gratitude to our clients across the various segments we serve. 

With the benefit of hindsight, I am grateful that we made the right calls in terms of strategic direction in 2013. Our transformation from a universal bank to a focused wealth management house is now complete. As such, our resilience in these challenging times is testimony to our business model and to our people. As a management team, we have done all that we could – individually and collectively – to encourage and be there for our colleagues as they grappled with the challenges placed on them by Covid-19.

I must admit that I am extremely proud of who we are as a house and of my colleagues. It would be unfair not to mention the transition of our IT infrastructure in Belgium to our common group platform, as well as the closure of the acquisition of Hof Hoorneman Bankiers. Both have taken Herculean efforts to realise successfully. 

Perhaps you are aware that in early January 2021, I announced my decision to step down from my role as CEO and Chairman of the Management Board. My motivation was, and is, quite simple: the firm is in good shape and it’s time to hand over the responsibilities to the next generation. We have been around for over 300 years as an independent house focused on trading and wealth generation. And it’s now time for the next generation to take over the responsibility. So must it be. Given that this is my last message to you as a Chairman, I would like to ask for your indulgence. 

Although I have not written about it here, please know that we see climate change as an existential threat as you will read in our annual report 2020. We are therefore in the process of deeply embedding this perspective in all our decision-making processes. I am sure that we will have an opportunity to talk about it more fully in the future. 

Several years ago, I was invited to speak at a Eumedion conference on what the future holds for the financial industry and the relevant governance model. I began by admitting that I had no idea what the future holds, but I was quite clear about the world we were willing to fight for – as a house and as individuals. I would like to share some of our thought processes with respect to some of the issues we face. The relevant point here is, of course, that we do not have all the answers but that we are working our way through these issues to create a sustainable and prosperous future for our clients, our people and society at large. 

As a house, we have often spoken about wealth preservation and creation in a sustainable way, and the importance of this in a societal context. While “sustainability” is much in vogue these days, for us it has long been an essential part of our approach to wealth creation. In essence, that has meant taking a longer term view to investing and making other important decisions.

In that context, the ability to act as an independent firm has been part of our core proposition to clients and employees. However, both these elements – our longer term view and independence – are often not compatible with a world given to instant gratification. If I am honest about it, a significant portion of investors are driven by very short-term considerations. It is their right, if they so choose, but it sits uncomfortably with our longer term orientation to wealth creation. 

Given our purpose and ambition as a firm, it would not surprise you that we subscribe to and indeed believe in a stable society, rule of law, fair distribution of wealth and equitable taxation. As such, these elements are intertwined and are essential to the process of making a society stable and sustainable. In that context, I would like to address the question of taxation and equitable distribution of wealth. There is a great deal of societal discussion about taxation and the role that financial institutions ought to play in that context. We clearly have a role to play in that context, which we do play now and we will do so in the future. We must not succumb to the notion that public opinion is more important than the law and the individual rights embedded therein. In this regard, recent pronouncements by certain members of the judiciary are a cause for concern. We believe that the rule of law must always prevail. 

We believe that a corporation and/or individual has the right to tax optimisation within the confines of the law, but with full transparency to the tax authorities. We also believe that even within the confines of the law, there is a moral dimension to it – for example, when aggressive structuring within the law may be tantamount to evasion. In such situations, we avoid entering into a relationship with the client and eschew related transactions. The important point for us is full transparency to the tax authorities. In the context of our investments, when we see that a corporation is engaged in aggressive tax structuring, we engage as a shareholder and enter into a dialogue with them about their social responsibility. 

I would also like to address the process of reconciling inclusion, diversity, meritocracy and performance. On the face of it, these are all desirable objectives and so one must just get on with the process of implementation. In practice, however, it’s not quite so straightforward and involves making continuous judgement calls to find the right balance. And even then, we cannot be sure that we get it right all the time.

We have found that performance improves significantly when we subscribe to the notion and practice of meritocracy. We know that meritocracy flounders in the absence of a level playing field (equal is not always level). Ensuring a level playing field necessitates a differentiated approach – for example, suitable childcare facilities and a culture of inclusion to reflect the needs of ethnic minorities or people of different nationalities. What is troubling about the debate surrounding diversity is that it has become a gender-only issue. It is not. In the interest of fairness, we must and will continue to approach the topic of diversity through the lens of inclusion. 

As a house, we have therefore focused on inclusion to drive the process of diversity forward. A house like ours needs technology as an integral part of our proposition to deliver products and services to our clients, and to fulfil the functions required under various licensing agreements. The important question is how to define our relationship with technology, including artificial intelligence. We know that our investments in technology and advanced analytics have served us well. But we also know that they have introduced and/or induced stress, loneliness and mental health issues.

Efficiency has improved but people have suffered – in part, due to blurring the lines between work and private life. The notion that one must be connected digitally at all hours of the day must be questioned from a long-term productivity perspective. We have noticed that remote working, while great in some aspects, also poses significant challenges to cultural cohesion in a firm. It’s clear to all of us that technology enables a great deal but that we must be selective in what we embrace. This is particularly relevant in the context of defining the post-pandemic new normal: how will we define it, what factors must we take into account, how will we ensure that we don’t make technology our master, and how will we retain our humanity? We do not have the answers, but this is an important and timely debate. As part of our deliberations, we will continue to reach out to our stakeholders as we make an informed choice.

I would like to thank you for taking the time to read this message. As a house, we are committed to our values and our purpose. Please note that I am very grateful for your support in a very difficult period and I would like to personally thank you for allowing me to do my job over the last eight years. 

Karl Guha, Chairman of the Management Board

Download our annual reports

Would you like to know more about specific subjects that featured in 2020? Download our reports regarding our financial year 2020. If you are looking for more information on our performance in previous years, you can find historic reports in our archive.

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