RepoRt on - BNP Paribas

players involved
in internal control
— executive management,
reporting
to the board of directors, is responsible
for the group’s overall internal
control system;
— operational staff,
at all levels (front/
middle/back office, support function
etc.), and in particular those in the
reporting line of command have firstlevel
responsibility for risk management
and leading permanent control
players. they carry out first-level
controls: controls of the transactions
handled by them and for which they
are responsible, controls on the operations
or transactions handled by
other operational staff or management
controls;
— permanent control functions.
these
functions carry out second-level
controls:
• the compliance function contributes
to permanent control of
the risk of non-compliance, so as
to ensure that the group conforms
to legal and regulatory provisions,
professional and ethical standards,
as well as the overall strategy of the
board of directors and executive
management guidelines. it has
considerable independence, notably
ensured by its joint exercise
with the Heads of operating units
over the managers of teams in
charge of compliance in the core
businesses and support functions
via a joint oversight arrangement.
the Head of compliance reports
to the chief executive officer and
represents the bank before the
commission bancaire with regard
to all matters concerning permanent
controls.
it also ensures, through dedicated
teams, the supervision of the
Permanent operational control
system of business lines (core
businesses and business lines) and
of support and control functions.
lastly, it ensures a coordination
role for the group’s overall internal
control system, by coordinating
the internal coordination control
committee and major cross-functional
projects, in particular those
geared at bolstering the internal
control system;
• the Risk management function
contributes, notably by its “secondtier”
controls of transactions and
new activities, to ensuring that the
credit and market risks taken by
bnP Paribas comply and are compatible
with its policy, the rating
level its seeks to have and its profitability
objectives. the duties associated
to this function at the group
risk management level are exercised
independently of the core
businesses and support functions,
contributing to the objectiveness
of its permanent control. its Head,
who is a member of the executive
committee, reports directly to the
chief executive officer;
• the f i n a n c e - d eve l o p m e n t
function is responsible for the
preparation of financial statements
and management control reporting
of quality, overseeing project
management for the group’s financial
information systems and ensuring
the compliance of the group’s
financial structure. its Head, who
is a member of the executive
committee, reports directly to the
chief executive officer;
• other functions,
which are key
players involved in Permanent
control in their respective areas of
responsibility: legal department,
tax department, information
te c h n o l o g y & p r o c e s s e s
department, Human resources
department.
— periodic control:
periodic control
(called “third-level” control) is independently
exercised by the general
inspection unit for all group entities.
it includes:
• inspectors based at headquarters,
who are authorised to carry out
controls throughout the group,
• auditors deployed in geographic
or line of business hubs.
Periodic controls are the responsibility
of the Head of the general
inspection unit who reports operationally
to the chief executive officer.
the Head also reports to the board
of directors directly, or through the
internal control, risk management
and compliance committee.
— the board of directors exercises
internal control duties. in particular,
it set up an internal control, risk
management and compliance
committee, which:
• analyses reports on internal control
and on measuring and monitoring
risks, as well as the general
inspection unit’s reports on its operations,
and exchanges of correspondence
with main regulators;
• examines the key focuses of the
group’s risk management policy.
120 <strong>RepoRt</strong> on CoRpoRate SoCial and enviRonmental ReSponSibility
the Heads of the compliance, risk
management and of the general
inspection functions report on the performance
of their duties to the chief
executive officer. whenever the latter or
the board of directors deem necessary,
they also periodically report to the competent
board committee (as a general rule,
the internal control, risk management
and compliance committee) and, as
the case may be, directly to the board of
directors. at their request, they may be
interviewed by the board.
coordination
of internal control
an internal control coordination
committee (iccc) meeting is held
periodically with the main players
involved in Permanent control (see
above), the Heads of the core businesses
or their representatives, and the Head
of Periodic control. this committee:
— is chaired by the Head of compliance,
who sits on the executive committee,
and steers the coordination of the
group’s internal control;
— is not intended to replace the different
group risk management committees
but to enhance their effectiveness
within the overall system;
— guarantees the consistency of the
internal control system and its compliance
with regulations;
— seeks to promote the use of shared
internal control tools;
— enhances the overall consistency of
the annual reports on internal control
and control of investor services
prepared by the Permanent control
and Periodic control functions as
required under their “charter of
responsibilities”, and of the report of
the chairman of the board of directors
on internal control procedures.
in 2009, the iccc’s work covered the
following main topics:
— review of the group’s fraud prevention
and detection policy;
— representative offices;
— “ closer to emerging standards” project,
aimed at aligning the bank on
best international practices in the
field of risk management;
— archival & records storage policy;
— monitoring of corrective measures,
in particular those recommended by
the general inspection unit.