BPCE_REGISTRATION_DOCUMENT_2017

2 REPORT ON CORPORATE GOVERNANCE Role and operating rules of governing bodies

Audit – Compliance – Risks follow-upon the reportsand investigations of the ● prudentielet de résolution (ACPR–

examinationof the independence and fees of Statutory Auditors; ● adoption of the Groupe BPCE Preventive Recovery Plan for 2017; ● follow-upon theICAAP(InternalCapitalAdequacyAssessmentProcess) ● for 2017, the methodsused withinthis frameworkand the resultsof internalstresstestsusedto determine figuresfor2017; follow-up on the Supervisory Review and Evaluation Process ● (SREP); follow-up on the enhanced compliance program established in ● accordancewith the Volcker rule, reviewof the senior management report on the effectivenessof the enhanced program, prepared by the Management Board (Senior Management) and expanded to include an assessmentof the system to ensure compliancewith the French Act on the Separationand Regulationof Banking Activities (SRAB) of July26, 2013. Dependingon the type of matterssubmittedto the SupervisoryBoard, discussionswere held and decisionsmade on the basis of the reports presented by the relevantBoard Committees.

Autoritéde contrôle

FrenchPrudentialSupervisoryand

Resolution Authority) andtheEuropeanCentralBank(ECB); risk monitoring: monitoring of consolidated risks, review of the ● impact of conditions in Europe on the Group, forward-lookingrisk management approach, monitoring of the Group’s market and credit limits, monitoringof risk governanceand annual review and reconsideration of Groupe BPCE’s risk appetite; review of the report on internal control prepared in accordance ● with Article 258 of the Ministerial Order of November 3, 2014 on internal control of banking sector companiesand the report on risk measurement and supervision, prepared in accordance with Article 262 of the Ministerial Order of November 3, 2014 on internal control of banking sector companies: work carried out by the InspectionGénérale division, annual compliancereport (annual report of the investment services compliance officer [RCSI], report on the annual check control program,report on credit risks), update on accounting risks; The Supervisory Board has instituted five specialized committees in charge of preparingits decisions and making recommendations.Their duties, resources,operatingproceduresand compositionare set out in the Supervisory Board’s internal rules. As far as possible, and depending on applicable circumstances,any discussion by the Supervisory Board that falls within the remit of a committee created by the Board is preceded by the referral of the matter to said committeeand a decisionmay only be made after that committeehas issued its recommendations or motions. The purpose of such consultationwith committeesis not to delegate to them powers that are allocatedto the SupervisoryBoard by law or the Articles of Association, nor is it to reduce or limit the Management Board’spowers. Whenever it is necessary to consult with a committee,the Chairman of that committee receives from the Management Board, within a reasonabletime frame (given the circumstances),all of the items and documentsthat will enable the committee to carry out its work and formulateits opinions, recommendationsand motions relating to the Supervisory Board’supcoming agenda. Committeemembers are chosen by the SupervisoryBoard based on a motionmade by the Chairmanof the Board from among its members. Members may be dismissed by the Supervisory Board. The term of office of committeememberscoincideswith their term of office as Supervisory Board Members. The renewal of both terms of office may takeplace concomitantly. Each committee is made up of at least three and at most seven members, except for the Remuneration Committee which contains eight members, including one employee representativeas stipulated by Article L.225-79-2of the French CommercialCode. The SupervisoryBoardmay also appointa person from outsideGroupe BPCE or a Non-Voting Director to any of these committees. The Cooperativeand CSR Committee includes both Non-VotingDirectors as of right among itsmembers. A Chairman is in charge of organizing the work conducted by each committee. The Chairman of each committee is appointed by the Supervisory Board. Specializedcommittees 2.4.2

AUDIT COMMITTEE

Duties The Audit Committee assists the Supervisory Board in verifying and reviewingthe financialstatementsand the ManagementBoard report on the company’s business. The Audit Committee is tasked with overseeing the process for preparingfinancialinformation,the statutoryaudit of the annual and consolidatedfinancial statementsby the StatutoryAuditors and their independence. Accordingly, it ensures the quality of information provided to shareholders and, more generally, fulfills the duties set out in the French CommercialCode. The Audit Committeeoversees: reviewingthe quarterly,half-yearand annual consolidatedfinancial ● statementsof the companyand Groupe BPCE, as well as the parent company financial statements, which are presented by the Management Board prior to their review by the Supervisory Board; verifying thatthe information provided is clear; ● reviewing the scope of consolidated companies and supporting ● evidence thereof; assessing the appropriateness of accounting methods adopted in ● preparing the company’s individual financial statements and the consolidated financial statements of the company and Groupe BPCE; reviewing the draft of the SupervisoryBoard Chairman’s report on ● internal control and risk management procedures as regards preparing and processing accounting and financial information; reviewing the prudential and accounting impacts of any material ● acquisition by the company or Groupe BPCE. The preparation of financial information In this respect,its duties include:

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Registration document 2017