EURAZEO_REGISTRATION_DOCUMENT_2017

3 GOVERNANCE

Risk management, internal control and main risk factors

Risk management players 3.4.1.2 All executive corporate officers and employees have responsibilities and powers that contribute, at their level, to the proper operation of the system and the achievement of objectives. The current organizational structure is based primarily on the association of responsibilities, tasks and delegations of authority of certain highly involved bodies and functions. In analyzing the contribution of the different risk management players, three groups can be identified: governance: the Supervisory Board and its three specialized • committees comprised of the Finance Committee, the Audit Committee and the CSR Committee; the first line of defense: this comprises direct contributors to the • identification, investment decision, transformation and portfolio enhancement stages. Members of the Executive Board and the Executive Committee and investment and investment opportunities sourcing (Eurazeo Development) teams represent the frontline of defense throughout the life of an investment opportunity or a company within the portfolio; the second line of defense: the Corporate teams, and primarily • the CSR, Risk Management, Legal, Human Resources and Finance Departments, represent the second rampart for the detection and prevention of risks during both the acquisition and transformation phases.

Processes for the preparation and processing of financial information (see Section 3.4.1.4) Cash management and financing Depending on the investment and divestment schedule, the level of Eurazeo’s available cash can vary significantly and can sometimes reach substantial levels. As of December 31, 2017, Eurazeo SE had available cash of €378.9 million. Close attention is therefore paid to the appropriate management of cash-related risks. The Director of the Treasury-Financing Department is in charge of the daily control of cash transactions. Control activities are part of compliance with the policy and prudential rules laid down by the Treasury Committee (see also Section 3.4.2.9, p. 199 on Liquidity risk and Counterparty risk). They notably cover the strict application of delegation of authority procedures, the monitoring of investment performance, the monitoring of counterparty risk, the analysis of changes in the cash position over the period, the preparation of cash forecasts, and the issue of alerts and recommendations to the Treasury Committee. Furthermore, the Director of the Treasury-Financing Department leads acquisition financing operations. He assists the investments teams by negotiating with financial partners to optimize financial terms and conditions. Monitoring by Audit Committees of risks specific to investments The creation of an Audit Committee in the majority of investments is key to the organization of exemplary governance (see Section 2.2.1, p. 97). These committees meet once every quarter on average. The Eurazeo Chief Financial Officer, a member of the dedicated investment team and Eurazeo’s Internal Audit and Risk Department are generally present or represented. Observations made following procedures during the acquisition phase, internal audits, monitoring of risk mappings and Statutory Auditor procedures are reviewed during these committee meetings. This process is part of the system ensuring Eurazeo Audit Committee members have the information necessary for the performance of their duties, and notably information on the efficiency of risk management and internal control systems.

Audit Committee

Supervisory Board

CSR Committee

Finance Committee

Executive Board/ Executive Committee

Finance Department

General Secretary

Investment Teams

CSR Department

Eurazeo Development

Audit and Risk Deparment

Legal Deparment

Governance

Line of reporting Management line

Q

First line of control Second line of control

Q

Q

188

2017 Registration document

Eurazeo