2018 Registration document and annual fi nancial report - BNP PARIBAS 431
5RISKS AND CAPITAL ADEQUACY PILLAR 3
5
Operational risk
■ the Group Supervisory and Control Committee is chaired by the Chief Executive Offi cer. Its other members are the Chief Operating Offi cer and the heads of the Compliance, RISK , LEGAL and General Inspection Functions. The Deputy Chief Operating Officers have standing invitations to attend. Its mission is to defi ne rules of principle and policies, to contribute to the organisation of the control functions and the consistency between them and to ensure their overall consistency vis-à-vis the operating entities of the Group;
■ the Ethics Committee is chaired by Jean-Marie Guéhenno, Chairman of the International Crisis Group. It is made up in equivalent proportion of members of the Group Executive Committee as well as independent outside individuals. The role of the Ethics Committee is to help formulate recommendations for the Group s code of conduct and business conducted in certain sensitive countries or business sectors;
■ the employee training programme: the Group s employees have an essential role in managing the reputation risk. This awareness training includes identifying, controlling, and managing the reputation risk, the Group s Values, and its ethics standards;
■ Corporate Communications: one of the major missions of Corporate Communication is to protect the reputation of the Group and its Entities, as well as being a source of information for employees and the public, whose trust is essential for the Group;
■ permanent control: identifying and managing the reputation risk are one of the objectives of the permanent control system. Procedures and controls are closely monitored wherever the risk is highest.
Whistleblowing procedures and periodic control recommendations are also taken into consideration. The reputation risk is also taken into account in the process for validating standard or non-standard transactions, new businesses, and new products. The Group has procedures for confl icts of interest; market integrity; adequacy and appropriateness of offers to clients; best execution of their orders; anti- money laundering, terrorist fi nancing and corruption; compliance with international sanctions and embargoes; and social and environmental responsibility that, along with the code of conduct, are conducive to effective management of reputation risk.
LEGAL RISK BNP Paribas is bound by specifi c local regulations applicable to the business sectors in which different Group entities operate, as in banking, insurance or fi nancial services.
The LEGAL Function is organised as follows:
■ a governance model based on:
■ the Executive Board, a bi-monthly Committee that provides a strategic orientation for LEGAL ,
■ the Global Legal Executive Committee, a bi-monthly Committee that ensures the implementation of strategic orientations for LEGAL ,
■ the Global Legal Risk Committee (a subcommittee of the Global Legal Executive Committee), which ensures that an appropriate system for risk management is in place in LE GAL ;
MANAGEMENT OF REPUTATIONAL RISK
EMPLOYEE TRAINING PROGRAM
ETHICS COMMITTEE
CORPORATE COMMUNICATIONS
PERMANENT CONTROLS
GROUP SUPERVISORY AND CONTROL COMMITTEE
➤ FIGURE 13: REPUTATION RISK MANAGEMENT FRAMEWORK
