PDF (2.47 Mo) - Le Crédit Agricole

21 RAPPEL_T1CORPORATE GOVERNANCE AND INTERNAL CONTROLChairman’s r eport on c orporate g overnance and i nternal c ontrol presentedto the Annual General Meeting of s hareholders on 21 May 2008The Board is informed of the main risks incurred by the Companyby the Audit and Risks Committee.The Chairman of the Crédit Agricole S. A. Audit and Risks Committeereports to the Board on the Committee’s work in general and, moreparticularly, on the presentation of the interim and annual report oninternal control and on risk measurement and monitoring. As of thedate of the Annual General Meeting, the annual report for 2007 willhave been presented to the Audit and Risks Committee and dulysent to the French Banking Commission and the Statutory Auditors.It will also have been presented to the Board of Directors.ROLE OF AUDIT AND RISKS COMMITTEE (1)The Crédit Agricole S. A. Internal Control Officers report to the Auditand Risks Committee created by Crédit Agricole S. A.’s Board ofDirectors.A key aspect of the Committee’s role is to verify the clarity ofinformation provided and to assess the appropriateness ofaccounting methods and the quality of internal control. As such, ithas broad powers to request and receive any information relatingto periodical control , permanent control, including accounting andfinancial information, and compliance control.It receives periodic reports on the activity management systemsand risk measurement. An interim report on internal control andrisk measurement and supervision for the first half of 2007 waspresented to the Committee at its meeting of 8 November 2007.The annual report for 2007 will be presented to the Committee atits meeting of 24 April 2008.The Chairman of the Audit and Risks Committee also receivesregular reports summarising the conclusions of audits conductedby Group Control and Audit.ROLE OF THE CHIEF EXECUTIVE OFFICER REGARDINGINTERNAL CONTROLThe Chief Executive Officer defines the company’s generalorganisation and oversees its implementation by competentqualified staff. He is directly and personally involved in theorganisation and operation of the internal control system. Hiskey responsibilities in this respect are as follows: defining rolesand responsibilities and allocating adequate resources to theinternal control function; ensuring that risk strategies and limits arecompatible with the financial position (capital base, earnings) andstrategic guidelines set by the Board of Directors; overseeing theimplementation of risk identification and measurement systems thatare appropriate for the company’s activities and organisation; andensuring that all essential information produced by these systemsis reported to him on a regular basis; ensuring the adequacy andeffectiveness of the internal control system through permanentmonitoring; receiving information on any failures identified by theinternal control system and the proposed corrective measures; inthis respect, the Chief Executive Officer receives regular reportssummarising the conclusions of audits conducted by GroupControl and Audit.33 – Internal control proceduresand risk management ands upervision within Crédit AgricoleRisk measurement and supervisionCrédit Agricole S. A. has risk measurement, supervision and controlsystems covering all risks (counterparty risk, financial risk, marketrisk, operational risk, legal and compliance risk, etc.), which areadapted to its business activities and organisation, and form anintegral part of the internal control system. Information is reportedperiodically to the Management Committee, the Board of Directorsand the Audit and Risks Committee, notably through the reports oninternal control and risk measurement and supervision.Detailed information on risk management is presented in themanagement report and in a separate note to the consolidatedfinancial statements.We note that an incident occurred during the summer of 2007 inproprietary trading operations in the Credit Markets & CDO productline at Calyon New York. This incident was rapidly detected andappropriate disclosure was made by the Group’s decision-makingand control bodies (particularly the Audit Committee) and stepswere taken immediately vis-à-vis local management. Followingthis incident, Calyon initiated a programme consisting of elevenprojects organised around three focuses:• governance, through a review of the operation of the Market Riskand New Products and New Activities Committees, and of thealert process;• the control system, with a review of the market risk managementprocedure and strengthened follow-up on activities;• reporting, with enhanced financial statements to be provided tothe bank’s management.Each project has been assigned to a clearly identified manager. Amonitoring committee has kept track of overall progress. It reportsto the Deputy Chief Executive Officer in charge of risks and supportfunctions. In the light of the February 2008 Lagarde Report, and asof the date of this report, some of these systems have undergoneadditional review.Furthermore, as the financial crisis intensified in the autumn of2007, the Group decided to draw up a master plan for Calyon’srisks.(1) Information on the Audit and Risk Committee’s work is detailed in the “Corporate Governance” section of this report.28 I Crédit Agricole S.A. I Registration d ocument 2007