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Banken for en verden i endring The bank for a ... - BNP Paribas

• report of the Chairman / internal control

The Chairman of the ICCC reports to the Chief

Executive Officer and, if the CEO or the Board

of Directors deem it necessary, to the Board of

Directors or the relevant Committee of the Board

(the Internal Control and Risk Management

Committee).

In 2006, the ICCC’s work covered the following

main topics:

• the Internal Control report for 2005 and the first

results reported by the Permanent Controls

function;

• the Group’s key charters or policies in the area

of Controls;

• relations with regulatory authorities, particularly

outside France, in terms of how these

policies are managed and overseen;

• the organisation of Internal Control processes

within the core businesses and ways of harmonising

the tools used, risk assessment

methodologies and the overall quality assurance

programme of the Periodic Controls

function;

• major operational issues such as the implementation

of European directives on markets

in financial instruments and on market abuse

as well as the new policy requiring validation of

exceptional transactions and new activities.

pROCEduRES

Written guidelines are distributed throughout

the Group and provide the basic framework

for the Group’s Internal Control, setting out

the organisational structures, procedures and

controls to be applied. A central team within the

Compliance function is responsible for ensuring

that the procedural guidelines are regularly monitored

for completeness, drawing on the support

of a network of Procedures Coordinators.

Following the completion in 2004 of the Group’s

cross-functional guidelines (levels 1 and 2),

regular updating of their content is an ongoing

process in which all the core businesses and

functions actively participate.

In 2006, the Compliance function brought a

number of updates to the guidelines. As regards

the organisation of controls, the twice-yearly

surveys on the effectiveness of processes have

been integrated into the twice-yearly reporting

of the Permanent Controls function – in recognition

of the fact that checking procedures is

among the key duties of Permanent Controls,

alongside identifying and assessing risks, running

controls, verifying reporting processes

and overseeing the monitoring system.

Among the Group’s cross-functional procedures

that were updated in 2006, the one dealing

with the validation of exceptional transactions,

new products and new activities deserves a

particular mention. This procedure was modified

to reflect changes in regulations and the

Group’s new Internal Control organisation. It is

applicable to all Group entities and represents

one of the pillars of the system for controlling all

forms of risk that the Group takes on.

Efforts are ongoing to streamline the set of procedures

and improve their distribution, make

them more accessible and design better tools

for storing them.

Internal Control standards

In 2006, the main players involved in Internal

Control continued to work on standardising the

main components of the system, covering families

of risks, risk assessments, standards for

controls and implementation of recommendations

issued by Periodic Controls, Management,

regulatory authorities or the Statutory Auditors.

172

CORPORATE GOvERNANCE

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