54 2019 Universal registration document and annual financial report - BNP PARIBAS

2 CorPorate GovernanCe and internal Control

2

Corporate governance report

The Board:

■ was informed of all the Committee s work on Group risks and liquidity;

■ approved changes to the Group s RAS;

■ approved the liquidity risk tolerance level and the policies, procedures and internal systems relating to liquidity risk;

■ approved the forwarded operational risk, permanent control and business continuity components of the internal control report to the ACPR;

■ approved the renewal of segment budgets.

Ad-hoc work The Internal Control, Risk and Compliance Committee:

■ monitored the outcome of the General Inspection s mission relating to the loss on derivatives used for hedging purposes in the United States in the fourth quarter of 2018;

■ reviewed the IT Department s action plan following the incidents occurring in the first quarter of 2019 and asked to be regularly informed regarding the implementation of this plan;

■ was advised of the follow-up letter on the ECB s shipping mission;

■ was advised of the follow-up letter on an ECB Deep Dive on outsourcing;

■ reviewed the risks associated with the reform of the Eonia and Euribor indices as well as the Group action plan required by the ECB;

■ was advised of the summary energy transition report drafted by RISK.

The Board:

■ was informed of the Committee s review of the ECB follow-up letter relating to the shipping mission and the Deep Dive on outsourcing;

■ validated the Bank s action plan within the context of the reform of the Eonia and Euribor indices as required by the ECB.

Compliance, internal control, litigation and periodic control The Internal Control, Risk and Compliance Committee:

■ reviewed the section of the management report on internal control and submitted it for the approval of the Board;

■ reviewed the 2018 internal control report including the Compliance Risk Assessment report, the key compliance points across all business lines and geographical areas, and the periodic control report;

■ reviewed reports on the organisation of internal control systems on anti-money laundering and terrorism financing, as well as on asset freezing in accordance with the provisions of the Decree of 21 December 2018;

■ reviewed the report on the assessment and monitoring risks in 2018, in accordance with the provisions of the Decree of 3 November 2014 on the internal control of companies operating in the banking, payment services and investment services sector subject to the control of the ACPR. It assessed the effectiveness of the policies and systems in place;

■ examined the annual update to the recovery plan and resolution documents, and recommended their approval by the Board; examined changes in French and European resolution regulations; and was informed of the complexities linked to the set-up of the Total Loss Absorbing Capacity (TLAC) and of the Minimum Requirement for own funds and Eligible Liabilities (MREL) mechanisms and the regulatory changes in progress;

■ was informed of the modification requests and additional requests made by the regulators concerning the recovery plan and resolution documentation;

■ reviewed, at each of its meetings, the list of ongoing legal disputes and proceedings, as well as the developments in each of the cases;

■ discussed the main outcomes of the periodic control carried out in 2018 and in the first half of 2019;

■ reviewed the General Inspection half-year report;

■ analysed the Compliance Function s half-year report;

■ continued to monitor the implementation of the remediation plan initiated in 2014 at the US authorities request (commitments made by BNP Paribas to control activities carried out in US dollars);

■ continued to monitor the outcome of the General Inspection review of remediation;

■ reviewed the MiFID II control framework and the results of the controls implemented in 2019;

■ was advised of the impacts of the Volcker rule on the Group and the findings of the Annual Report on the deployment of this device within the Group;

■ regularly reviewed the fines imposed on the Bank by supervisors.