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■ Capital position and Solvency II 

■ Executive remuneration 

■ Divestments and restructuring of businesses 

■ Governance and sustainability issues 

■ Legal and compliance issues 

## Highlights 

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. 

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. 

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. 

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 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. 

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. 

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. 

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. 

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. 

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