2012 Registration document and annual financial report - BNP Paribas

RISKS AND CAPITAL ADEQUACYRisk management5RISK CULTUREONE OF THE GROUP’S CORE FOUNDINGPRINCIPLESThe BNP Paribas Group has a strong risk culture.Front-line responsibility for managing risks lies with the divisions,business lines and functions that propose the underlying transactions.They are expected to develop a sense of risk among their employees andto be fully aware of and understand both current and potential futuretrends in their risks.Executive Management has chosen to include the risk culture in two ofits key corporate culture documents:■ Responsibility CharterIn 2012, Executive Management drew up a formal ResponsibilityCharter based on four strong commitments, inspired by the Group’score values, management principles and code of conduct. One of thefour commitments is “Being prepared to take risks, while ensuring closerisk control”.Financing the economy, supporting projects, helping clients to managetheir currency or interest rate exposure – all this means accepting adegree of risk. One of BNP Paribas’ great strengths is precisely thisexpertise in managing risk.The Group believes that tight risk control is its clear responsibility, notonly towards its clients but also towards the financial system as a whole.The Bank’s decisions on the commitments it makes are reached after arigorous and concerted process, based on a strong shared risk culturewhich is present across all levels of the Group. This is true both forcredit risk arising from lending activities, where loans are granted onlyafter in-depth analysis of the borrower’s position and the project to befinanced, and for market risks arising from transactions with clients,which are assessed on a daily basis, tested against stress scenarios andgoverned by a system of limits.As a highly diversified Group, both in terms of geography and businessactivity, BNP Paribas is able to balance risks and their consequences assoon as they materialise. The Group is organised and managed in such away that any difficulties arising in one business area will not jeopardisethe Bank’s other business activities.■ Management PrinciplesOne of the Group’s four key management principles is «Risk-AwareEntrepreneurship», which highlights the importance of the risk culture:Risk-aware entrepreneurship means:■■being fully accountable,acting interdependently and cooperatively with other entities toserve the global interest of the Group and its clients,■■being constantly aware of the risks involved in our area ofresponsibility,and empowering our people to do the same.SPREADING THE RISK CULTUREStrict risk management is an integral part of the Bank’s makeup. A cultureof risk management and control has always been one of its top priorities.The Group is striving to spread this culture yet further given its stronggrowth over the past few years and the current climate of crisis. InMay 2010, BNP Paribas launched the Risk Academy, a cross-functionalGroup initiative, to help spread and promote its risk management culture.The Risk Academy is an open, group-wide venture, involving all businesslines and functions and sponsored by the Bank’s Executive Committee.Designed for the benefit of all staff and organised around a progressive,participative framework, its main aims are:■ help strengthen and spread the risk culture within the Group;■ promote training and professional development in the area of riskmanagement;■ run the Bank’s risk management communities.The Risk Academy therefore offers the following products and servicesunder a single umbrella:■ C ore Risk Practices, the basic principles forming the underlying themeof the Risk Academy, advocating sound risk management practices;■ e-learning r isk a wareness m odule, providing an introduction to thevarious risks managed by the Bank;■ risk t raining c atalogue for employees involved in risk-related activities;■ online l ibrary of documents to help share knowledge about riskmanagement;■ interactive presentations by BNP Paribas risk's experts, implementedin main sites of the Group.Lastly, the risk culture is also spread throughout the Group by linkingcompensation to performance and risk (see chapter 7, section entitled“A competitive compensation policy in line with international rules”).52012 Registration document and annual financial report - BNP PARIBAS 239