592019 Universal registration document and annual financial report - BNP PARIBAS

2CorPorate GovernanCe and internal Control

2

Corporate governance report

■ gives its prior approval to any significant strategic operation which falls outside the approved orientations;

■ promotes long-term value creation by BNP Paribas.

1.2. CODE OF CONDUCT The Board of directors and the Executive Management have developed a Code of conduct of BNP Paribas Group which defines the standards of conduct in line with the values and missions determined by the Bank. This Code, which shall be integrated by each business line and each employee, governs the actions of each employee and guides the decisions at every level of the organisation. For this purpose, the Board ensures the Executive Management implements this Code into business lines, countries and regions.

1.3. GOVERNANCE, INTERNAL CONTROL AND FINANCIAL STATEMENTS

The Board of directors:

■ appoints the Chairman, the Chief Executive Officer (CEO) and, on the recommendation of the latter, the Chief Operating Officer(s) (COO);

■ sets any limits to the powers of the Chief Executive Officer and of the Chief Operating Officer(s);

■ examines the system of governance, which includes, in particular, a clear organisational structure with well defined, transparent and consistent sharing of responsibilities, efficient processes to identify, manage, monitor and report the risks to which the Company is or might be exposed to; it periodically assesses the efficiency of this governance system and ensures that corrective measures have been taken to remedy any failings;

■ determines the orientations and controls their implementation by the actual managers of the monitoring measures in order to guarantee an effective and prudent management of the Company, including the segregation of duties in the organisation of the Company and the prevention of conflicts of interests;

■ ensures the fulfilment of the obligations which are incumbent on it concerning internal control, and, in particular, examines, at least twice a year, the activity and the results of the internal control;

■ approves the management report and the corporate governance report attached to it;

■ carries out the controls and verifications which it deems appropriate;

■ ensures that the Chief Executive Officer and/or Chief Operating Officer(s) implement a policy of non-discrimination and of diversity including gender balance in management bodies;

■ ensures the implementation of process for preventing and detecting corruption and influence-peddling for which it receives all the information required for that purpose;

■ examines and closes the financial statements and ensures their sincerity;

■ reviews, at least once a year, the draft budgets and the drafts of the various statutory and regulatory reports which the Chief Executive Officer submits to it;

■ prepares a suitability policy that defines the assessment of Members of the management body and of Key function holders (the Policy on the suitability of Members of the management body and Key function holders ); the Board of directors (and its committees) apply this policy and revise it regularly to account in particular for any regulatory changes;

■ gives its approval prior to the dismissal of the Heads of the following functions: Risk Management, Compliance, or the General Inspection.

1.4. RISK MANAGEMENT The Board of directors:

■ regularly examines, in connection with the strategy it has defined, the opportunities and risks, such as financial, legal, operational, social, and environmental risks, as well as the measures taken as a result;

■ as such, approves and regularly reviews the strategies and policies governing the taking, management, monitoring and reduction of the risks to which the Company is or might be exposed to, including the risks caused by the economic environment. In particular, the Board of directors approves the global risk limits and puts into place a specific process organising its information and, as the case may be, the referral of the matter to it in the event these limits are exceeded.

1.5. COMMUNICATION The Board of directors:

■ ensures that the financial information disclosed to the shareholders and the markets is of high quality;

■ controls the process of financial publication and communication, quality and reliability of the information intended to be published and communicated by the Company.

1.6. REMUNERATION The Board of directors:

■ allocates, without prejudice to the powers of the Annual General Meeting, the directors attendance fees;

■ adopts and regularly reviews the general principles of the remuneration policy of the Group which relates, in particular, to the categories of staff including the risk takers, staff engaged in control functions and any employee who, given his overall income, is in the same remuneration bracket as those whose professional activities have an impact on the risk profile of the Group;

■ decides, without prejudice to the powers of the Annual General Meeting, the remuneration of the managers who are corporate officers (dirigeants sociaux), in particular their fixed and variable remuneration as well as any other means of remuneration or benefit in kind.

1.7. RESOLUTION The Board of directors settles the preventive recovery plan of the institution, as well as the items necessary to establish the resolution plan communicated to the competent regulatory authorities.