52 2019 Universal registration document and annual financial report - BNP PARIBAS

2 CorPorate GovernanCe and internal Control

2

Corporate governance report

■ was informed of the results of the annual employee satisfaction survey (Global People Survey) and of the follow-up actions;

■ reviewed the recommendation of the Central Works Council on the Bank s strategic guidelines and issued a response to its observations;

■ examined the issuance amounts of debt securities in the form of senior and subordinated debt;

■ acknowledged the Executive Management s comments on the net margin generated on new lending in 2018 and in the first half of 2019;

■ continued to track the amounts allocated to the various objectives of the Company s share buyback programme authorised by the Annual General Meeting;

■ authorised the delegations of authority for the issuance of debt securities, particularly for bonds and similar;

■ examined the related-party agreements entered into and authorised in previous years but still in force in the past year;

■ renewed the delegation of responsibility for the internal control of regulated subsidiaries so requesting and received a report from the subsidiaries in question;

■ reviewed and approved the answers to written questions submitted by shareholders at the Annual General Meeting.

For the fifth time, SSM representatives from the ECB and representatives of the Autorité de contrôle prudentiel et de résolution (ACPR) attended a Board meeting (on 28 March 2019). They outlined their priorities for banking supervision for 2019, which was followed by an exchange of views with the members of the Board.

As in previous years, the Board of directors met on 18 December 2019 for a strategy seminar focused, inter alia, on the performance of the 2017-2020 strategic plan and the challenges for the Group s business lines within Domestic Markets, Corporate and Institutional Banking and International Financial Services.

2.b Work performed by the Financial Statements Committee and work approved by the Board of directors in 2019

MeetingsNumber of members

Attendance rate

5 5 96%

Examination of the financial statements and financial information The Financial Statements Committee:

■ conducted quarterly reviews of the financial statements based on the documents and information provided by Executive Management and the work carried out by the Statutory Auditors;

■ each quarter, analysed summary reports of the consolidated results and annualised return on equity, as well as results and profitability by field of activity;

■ each quarter, reviewed the Group s consolidated balance sheet and changes to said balance sheet; on that occasion, it was given an update on off-balance sheet commitments;

■ each quarter, examined the report on audit control points flagged by Group entities in the context of the certification of their financial statements. It analysed trends in the risk level observed for each of the thirty major accounting controls;

■ each quarter, was advised of work to make models used to calculate credit risk provisions more reliable within the context of IFRS 9;

■ reviewed changes in equity and the capital adequacy ratio with regard to the new prudential solvency regulations and new requirements imposed by the regulator;

■ examined trends in revenues and the cost/income ratio by business for each quarter;

■ examined the accounting internal control summary reviewed each quarter;

■ examined the dividend distribution policy in view of the ECB recommendation concerning compliance with prudential and solvency rules;

■ kept track of the changes in prudential requirements and reviewed changes in risk-weighted assets;

■ examined the provisions for litigation on a regular basis;

■ examined goodwill and proposed adjustments;

■ conducted a detailed analysis of the composition of the Group s balance sheet;

■ read the explanations relating to Credit Valuation Adjustment (CVA) adjustments.

Each quarter, when reviewing the results, it:

■ heard the comments of the Chief Financial Officer and senior executive in charge of accounting and financial reporting;

■ interviewed the Chief Financial Officer, without the presence of the Executive Management;

■ heard the Statutory Auditors comments and conclusions on the quarterly and annual financial statements, where applicable;

■ asked the Statutory Auditors the questions it considered necessary, without the presence of the Executive Management or the Chief Financial Officer;

■ reviewed the accounting certification mechanisms as part of the internal control procedures.

It reviewed the section of the management report concerning the internal control procedures relating to the preparation and processing of accounting and financial information in respect of 2018; it recommended approval by the Board of directors.

The Board:

■ was informed of all the work of the Financial Statements Committee and the findings of the Statutory Auditors at the end of each reporting period;

■ examined and approved the results of the fourth quarter of 2018, full-year 2018 and the first three quarters of 2019;

■ reviewed and approved draft press releases at each meeting held to discuss the financial statements;

■ acknowledged the report of the discussions held by the Financial Statements Committee with the Statutory Auditors and the Chief Financial Officer, without the presence of the Executive Management;

■ approved the section of the management report on the preparation and processing of accounting and financial information in respect of 2018.