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 ompany2Second-level permanent control■ With an estimated 1,577 FTEs at the end of the 2012, the Complianceworkforce (excluding Permanent Control-2OPC) remained stablecompared to the 2011 figures (1,567 FTEs) and was in line with theestimates made in the previous year.Among the main highlights of the year, on the one hand, the RetailBanking teams in France were strengthened to deal with the increasedvolume of transactions to be analysed, and on the other, the InvestmentPartners teams were reduced due to the restructuring of that businessline (closures/mergers of entities).Staffing levels in the Group’s other entities remained virtuallyunchanged, as they did in the Group f unctions.The ratio of Compliance employees (excluding 2OPC) to total Groupemployees was 0.81%, compared to 0.79% in 2011.■ The repositioning of the permanent control and operational riskoversight function decided upon in 2010 has led to a reallocation tothe operational entities of part of the workforce (400 FTEs) previouslycounted as part of permanent operational control. With effect from2010, only staff that can clearly be assigned to second-level controls/second line of defence functions have been counted. The 2010 figuresare therefore not comparable with earlier figures. The change in 2012can be explained by the trend in the activity of certain business linesand various adjustments in the Retail business lines.■ At the end of 2012, the Group Risk Management workforce, includingthe risk departments at BNP Paribas Fortis, BGL BNP Paribas, BNL andPersonal Finance, remained stable at 1,965 FTEs.Periodic controlThe workforce of General Inspection was 1,030 FTEs on31 December 2012, including 970 FTEs devoted to the performanceof audit (excluding the function’s support staff) compared to 1,107(1,043 FTEs excluding the function’s support staff) at the end of 2011.The overall ratio of auditors to auditees was 0.53%.INTERNAL C ONTROL P ROCEDURES R ELATED TO THE P REPARATIONAND PROCESSING OF A CCOUNTING AND F INANCIAL I NFORMATIONROLES AND RESPONSIBILITIES INTHE PREPARATION AND PROCESSINGOF ACCOUNTING AND FINANCIALINFORMATIONActing under the authority of the Chief Executive Officer, the Financefunction is responsible for the preparation and processing of accountingand financial information. Its duties and responsibilities are defined in aspecific charter and include:■ defining accounting policies and standards as well as managementprinciples and standards;■ producing accounting information and associated regulatory reports;■ producing information relating to solvency and liquidity ratios,including the determination of such ratios and associated regulatoryreports;■ preparing management information (achieved and forecast) andproviding the necessary support for financial policy;■ managing the risk associated with fi nancial information (results,balance sheet, solvency, liquidity) by implementing a permanentoperational control system;■ handling the Group’s corporate communication, ensuring that it is ofgood quality and well-perceived by the markets;■ overseeing the architecture, design and deployment of the financialinformation systems (results, balance sheet, solvency, liquidity);■ handling the organisation and operational processing of activitiesassociated with the Finance f unction;■ exercising a warning function as regards Executive Management.These tasks require the various persons concerned to have athorough knowledge of their particular area. That knowledge relies onunderstanding and monitoring financial information at every level of theGroup, while complying with applicable time limits.Thus, the responsibilities of the Finance f unction are exercised in thefollowing way:■ The production of accounting and financial data, and the controlsthat contribute to their reliability, are first handled by the Financef unction at the level of each entity. The Finance Department of theentity, transmits the information produced to the Division/OperationalEntity (OE) and, certifying that it is reliable, in accordance with theinternal certification procedure described below.■ For their part, the Divisions/OE – Business Lines then perform afinancial analysis, checking the data produced by the entities, andcontribute to its quality, particularly by carrying out appropriatereconciliations between the accounting and management data, attheir level.■ Centrally, Group Finance prepares the reporting instructions distributedto all the Divisions/OE – Business Lines and consolidated entities,thus promoting the homogenisation of the data and their compliancewith the Group’s rules. It gathers all the accounting and managementinformation produced by the entities once it has been approved bythe Divisions/OE and assembles and consolidates these data for useby Executive Management or for external reporting to third parties.682012 Registration document and annual financial report - BNP PARIBAS