Annual report 2005 - Dexia.com

DexiaCorporate governanceThe audits completed in 2005 gave rise tothe establishment of various action plansto correct weaknesses detected in theinternal control system. Each action planwas approved by the Management Boardof the entity concerned and is monitoredon a regular basis in order to ensure thatthe recommendations made are effectivelyimplemented.MethodsThe global approach to risk, the commonaudit methodology, which was completed in2005 by manuals on audit and risk assessmenttechniques, and the reporting and followupprocedures established at the level ofthe parent company, contribute to Dexia’seffective internal control system.2005 was the first full year in which Dexiaused the new procedure to monitor theimplementation of recommendations usingapproach that is differentiated on the basis ofpriorities and is more qualitative than it hasbeen in the past.In addition, the audit tool designedto promote the harmonization andimprovement of the quality of the work wasused by the operating entities within pilotmissions.Finally, in an effort to develop a cohesive auditunit, all auditors and inspectors from theGroup attended a seminar that offered reportsand workshops.Ethics and complianceSince its creation at the beginning of 2003,the ethics and compliance function has beenconsolidated to form a true Complianceunit composed of all Compliance Officerswithin each entity, subsidiary or branchthat performs an activity within the DexiaGroup. The unit is directed by a coordinationcommittee composed of the ComplianceOfficers for the three operating entities underthe chairmanship of the Chief ComplianceOfficer (CCO) of Dexia.The role of the committee is, first, tocoordinate the regulatory watch mechanism,and to establish, disseminate and ensurecompliance with Group policies and, second,to control, through information, awareness,training and audits, compliance risks, whichare the risks resulting from failure to complywith the laws, regulations or standards of theprofession.PrinciplesDexia’s integrity policy is based on thefollowing principles:• the application of the same principlesof ethics and conduct within all of Dexia’sentities;• compliance with both domestic andinternational laws and regulations;• the promotion of a climate of transparencyand confidence with customers, employeesand shareholders;• the definition of a policy to prevent fraudor any other misuse of assets, systems,information or procedures;• continued integrity, particularly inconducting transactions or providinginformation to the financial markets.120