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 ompany2Relations with regulators■ The committee was informed of progress in work on the Recovery andResolution Plan required by the regulators.■ It was informed about relations with French and foreign regulators, asreported by Executive Management.■ It examined the exchange of correspondence between the Autorité deContrôle Prudentiel (ACP), the Autorité des Marchés Financiers (AMF)and Executive Management, and reported thereon to the Board ofDirectors.4.c The Corporate Governance and NominationsCommitteeThe members of the Corporate Governance and Nominations Committeewas chaired by Claude Bébéar until 23 May 2012, and then by MichelPébereau from 30 November 2012. Its other members are LaurenceParisot and Daniela Weber-Rey. Apart from Michel Pébereau, who isnot regarded as independent according to the Afep-Medef criteria, butwhose experience, knowledge of the sector and high degree of personalintegrity guarantee his freedom of judgment and sense of the publicinterest, its members are independent Directors who have experience ofcorporate governance issues and of putting together management teamsin international companies.The committee does not include any members of Executive Management,but involves the Chairman in its work on selecting new Directors ornon-voting Directors and on succession planning for corporate officers.An extract from the Internal Rules relating to the duties of the CorporateGovernance and Nominations Committee is set out in an appendix tothis report.The Corporate Governance and Nominations Committee met three timesin 2012, with a 100% attendance rate.■ The committee discussed developments in the Group’s corporategovernance on several occasions.It proposed to the Board of Directors the draft regulated agreementterminating Jean-Laurent Bonnafé’s contract of employment.■ The committee prepared the assessment by the Board of Directors ofhow the Board and its specialised committees functioned. It examinedthe membership of the Board of Directors and reviewed the positionof each Director. It discussed the contribution of each Director to thework of the Board and, where applicable, of the committees, havingregard to their expertise and involvement in the discussions.■ The committee proposed that the Board initiate a selection processin order to prepare a proposal for presentation to the AnnualShareholder’s Meeting for the potential replacement of one of theDirectors due to retire by rotation.■ Following this process, the committee proposed that the Boardnominate Pierre André de Chalendar.■ The committee examined the section of the Chairman’s draft report oncorporate governance, and recommended its approval by the Boardof Directors.4.d Compensation CommitteeThe members of the Compensation Committee were Denis Kessler(Chairman), Jean-François Lepetit, and Hélène Ploix with effect from10 February 2012. The composition of the committee complies with therecommendations of the Afep-Medef Corporate Governance Code; itsmembers have experience of compensation systems and market practicesin this area. Each member of the Compensation Committee is also amember either of the Financial Statements Committee (Denis Kessler)or the Internal Control, Risk Management and Compliance Committee(Jean-François Lepetit and Hélène Ploix). This structure is likely to benefitthe work of the Board of Directors on matching compensation principlesto the Bank’s risk policy.The Committee does not include any members of Executive Management.The Chairman of the Board of Directors is not a member of the C ommittee,but is invited to take part in its deliberations, except where they concernhim personally.An extract from the Internal Rules relating to the duties of theCompensation Committee appears in an appendix to this report.The Compensation Committee met six times in 2012, with a 100%attendance rate.■ The committee examined issues involving the compensation ofemployee categories subject to specific regulations. It received detailedinformation on the group of employees whose professional activitieshave a significant influence on the Company’s risk profile. It reviewedthe method of determining variable compensation packages forregulated activities and was informed of the process for determiningthe compensation of the relevant employees. It examined GeneralInspection’s report on this process. It examined several amendmentsto the principles underlying compensation for regulated activities andsubmitted them to the Board of Directors for approval. It reviewedthe list of the highest paid employees in 2011. It met with the Headof Group Human Resources and noted that the policy implementedcomplies with the prevailing regulations and professional standards.It was informed of the correspondence with the Autorité de ContrôlePrudentiel on these issues.■ The committee determined and proposed to the Board the variablecompensation to be paid to corporate officers in respect of 2011 andthe provisions for deferring this compensation over several years andindex-linking a proportion of it to changes in share price.■ It discussed the incentive plans for corporate officers designed toencourage value creation over the long term. It proposed that theBoard approve a long-term compensation plan entirely based onperformance conditions and index-linked to changes in BNP Paribas’share price. It proposed that the plan should cover the Chief ExecutiveOfficer and the Chief Operating Officers.■ It submitted the principles underlying the corporate officers’ 2012compensation for the Board’s approval.562012 Registration document and annual financial report - BNP PARIBAS