2012 Registration document and annual financial report - BNP Paribas

2CORPORATEGOVERNANCEReport of the Chairman of the Board of Directors on the manner of preparation and organisationof the work of the Board and on the internal control procedures implemented by the c ompany2Global Share-Based Incentive Plan –Capital increase for 2012■ Acting on a proposal from the Compensation Committee, the Boardadopted the Group’s Global Share-Based Incentive Plan for 2012.This plan concerns 1,921,935 performance shares for the benefit of5,365 beneficiaries whose level of responsibility, contribution to resultsor professional potential means that they are key elements of theGroup’s strategy, development and profitability. The Board approvedthe rules and characteristics of this plan.■ The Board of Directors approved the terms and conditions of a newcapital increase reserved for employees.4. THE WORK OF THE COMMITTEES IN 20124.a Financial Statements CommitteeIn 2012, the members of the Financial Statements Committee were LouisSchweitzer, Chairman, Denis Kessler, Hélène Ploix until 14 February 2012,Emiel Van Broekhoven, Fields Wicker-Miurin from 2 May 2012 and ThierryMouchard from 5 November 2012. The majority of the Committee’smembers have experience and expertise in the areas of corporatefinancial management, accounting and financial information.The C ommittee does not include any members of Executive Management.To ensure that the Committee members have up-to-date information andknowledge, the Group’s Chief Financial Officer, who attends its meetings,makes presentations on important subjects, which are then examinedand discussed in the presence of the Statutory Auditors.Documents relating to the agenda, and in particular documentationconcerning results and internal control, are prepared in a standardformat for presentation.An extract from the Internal Rules relating to the duties of theCompensation Committee appears in an appendix to this report.The Financial Statements Committee met four times in 2012, with a100% attendance rate. It also met twice with the Internal Control, RiskManagement and Compliance Committee.Examination of the financial statements and financialinformation■ Each quarter, the Financial Statements Committee examined thefinancial statements on the basis of the documents and informationprovided by Executive Management and the work carried out by theStatutory Auditors.■ Each quarter the Committee analysed the summary consolidatedresults, annualised return on equity and results and RoE by businesssegment. It also examined trends in the Basel 2, Basel 2.5 andestimated Basel 3 solvency ratios, and risk-weighted assets.■ It reviewed the Group’s consolidated balance sheet at 31 December 2011and changes from end-2011 to 30 June 2012. On the same occasion, itwas briefed on the Group’s off-balance sheet commitments. In additionto this presentation of the financial statements, there was a quarterlypresentation of a cash balance sheet , which was better suited to theanalysis of balance sheet structure and liquidity.■ The Committee reviewed selected exposures based on therecommendations of the Financial Stability Board (FSB). It wasadvised of the reduction in the Group’s exposures to sovereign debtand examined the impacts of the disposals on the Group’s results.■ At the time of each quarterly review of the financial results, the FinancialStatements Committee met with the Group’s Chief Financial Officerand with the officer responsible for accounting and financial reporting,without the presence of the Chairman or Chief Executive Officer. On thisoccasion, it noted a certain stabilisation of the accounting rules in 2012,but also the prospect of a number of developments in 2013, relating inparticular to the valuation of certain financial instruments and pensioncommitments. The committee heard the comments and findings ofthe Statutory Auditors concerning the results for each quarter. It metwith the Statutory Auditors, without the presence of the Chairman,the Chief Executive Officer and the Group’s Chief Financial Officer, andasked questions it considered necessary, particularly on the Group’sexposure to sovereign debt and on the rational and prudent nature ofthe accounting choices made.Accounting internal control■ Each quarter, the Financial Statements Committee examined the reporton audit control points reported by Group entities in the context ofcertification of their financial statements. It analysed trends in therisk level observed for each of the thirty major accounting controls.■ The Financial Statements Committee examined the section of theChairman’s draft report on internal control procedures relating to thepreparation and treatment of accounting and financial information,and recommended its approval by the Board of Directors.Relations with the Group’s Statutory Auditors■ The Financial Statements Committee received a written certificate ofindependence from each of the Statutory Auditors.■ It was informed of the amount of fees paid to the Statutory Auditorsand reviewed the summary report on assignments not directly relatedto the statutory audit, without the presence of the Statutory Auditors. Itauthorised a non-audit-related assignment subject to its prior approvalin accordance with the Internal Rules.Joint meetings with the Internal Control, RiskManagement and Compliance Committee■ The committees met to discuss the report drawn up in accordancewith Regulation CRBF 97-02 and a memo addressed to them on themain developments in the areas of corporate governance and riskmanagement procedures. They discussed the measures taken by theBank to refocus its market activities, reduce certain exposures andstrengthen operational risk control. They heard the comments of theChief Risk Officer on the key results of the market risks stress tests.542012 Registration document and annual financial report - BNP PARIBAS