2018 Registration document and annual fi nancial report - BNP PARIBAS58
2 CORPORATE GOVERNANCE AND INTERNAL CONTROL
2
Corporate governance report
Governance The Governance, Ethics, Nominations and CSR Committee:
■ examined, as part of a long-term review of the succession of executive corporate offi cers and taking into account the major transformation challenges within the banking sector, the best way to ensure the effi ciency, balance, stability and visibility of governance in the interest of the Company and its shareholders.
To this effect, it proposed that the Board submit an amendment to the Articles of association to the Annual General Meeting on 24 May 2018, which it approved. This amendment consists of raising the age limit of executive corporate offi cers by four years for the Chairman and by two years for the Chief Executive Offi cer, as well as allowing the Board of directors, and other executive corporate offi cers, to extend the age limit of the Chief Operating Offi cer by one year;
■ examined and proposed that the Board reviews the Internal r ules and the replacement of the three existing procedures (multiple directorships; conflicts of interest; identification, selection and succession of d irectors ) by the Suitability p olicy for M embers of the management body and Key function holders in accordance with recent regulatory changes. Thus, the amendments proposed comply with the Afep-Medef Code reviewed in June 2018, the EBA Guidelines published on 26 September and effective on 30 June 2018 and Ordinance No. 2017-1162 of 12 July 2017.
(i) The Committee proposed amending the Internal r ules by specifying the duties relating to the selection of appointment of and succession plan for the Chairman, M embers of the management body and K ey function holders within the meaning of the EBA. In particular, it indicated to the Board that the Committee (i) will regularly examine the Suitability p olicy for M embers of the management body and Key function holders in terms of selection of, appointment of and succession plan for effective directors, Chief Operating Offi cer(s), the Chairman and K ey function holders defi ned in this policy and will formulate recommendations in this respect, (ii) will help with selections and appointments as well as the preparation of succession plans for the Chairman and the members of the Executive Management in accordance with the Suitability Policy;
(ii) The Committee has drafted the Suitability p olicy for M embers of the management body and K ey function holders. In particular it has defi ned the scope of K ey function holders within the meaning of the EBA for BNP Paribas. The Committee will monitor the application of this Suitability p olicy by Executive Management for key functions in particular conducting continuous suitability and F it and P roper assessments;
■ was informed of the policy defi ned by Executive Management to put in place a Group Corporate Governance Policy applicable to all of the Group s subsidiaries which are consolidated prudentially regardless of whether or not they are governed within Europe. The Committee will be informed annually of the implementation of this policy and the result of the associated controls;
■ took note of the minutes of the Nominations Committees of the subsidiaries with a balance sheet total of over EUR 5 billion;
■ was informed of the content of exchanges between the Chairman of the Board of directors and investors about the Bank s governance;
■ examined the report on corporate governance with respect to 2017; it recommended approval by the Board of directors.
The Board:
■ unanimously approved the amendment of the Articles of association submitted to the vote of the Annual General Meeting on 24 May 2018;
■ approved the updated version of the Internal r ules, the Suitability p olicy for M embers of the management body and Key function holders within the meaning of the EBA Guidelines and the scope of key function holders within the meaning of these Guidelines;
■ approved the corporate governance report with respect to 2017.
Assessment of the Board of directors The Corporate Governance, Ethics, Nominations and CSR Committee appointed an external expert advisor to perform this assessment on the Board.
Within this framework, the Committee:
■ validated the content of the questionnaire proposed by the advisor prior to performing the assessment. The advisor conducted individual interviews with each of the d irectors based on an interview guide and their written responses to the questionnaire;
■ examined the result of the 2017 assessment performed by the advisor. This highlighted that the BNP Paribas Board of directors observed the highest standards of the CAC 40. The advisor revealed (i) the satisfaction of director s on how the Board functions which they believe has improved during their terms of offi ce, in particular thanks to the optimal relationship between the Chairman and the Chief Executive Offi cer and (ii) the Board s professionalism and commitment;
■ proposed to the Board, following improvements identifi ed by the advisor, to base the action plan on:
(i) continued formalisation of processes linked to the succession of executive corporate offi cers and discussion on the best means for the Board to monitor succession processes for key managers,
(ii) deepening d irectors understanding of regional issues and the organisation of meetings with operational managers;
(iii) optimisation of the balance between issues relating to the Bank s business and those concerning compliance and regulations;
■ prepared the internal assessment of the Board of directors for 2018.
The Board approved the action plan following the 2017 assessment.
Code of conduct The Corporate Governance, Ethics, Nominations and CSR Committee, in accordance with its powers, dedicated a session to examining the deployment of the Code of conduct within the subsidiaries and the Group s geographical areas. In particular, it was informed of the creation of a unit supporting victims of harassment and the review of the Bank s whistleblowing system in accordance with the new banking requirements.
