GROUPAMA / 2019 Universal Registration Document

3 CORPORATE GOVERNANCE AND INTERNAL CONTROL Internal control procedures

3.4

INTERNAL CONTROL PROCEDURES

3.4.1

CONTROL ENVIRONMENT

vocational training, occupational health, production and transmission of statistics, legal reports,etc.; “Sharedservicecentre”activitiesfor all payrolloperationsand the ● administration of personnel for eight companies of the Group including Groupama Assurances Mutuelles. The Group HR Department also carries out social projects in the consolidatedcompanies,relating to the obligationsof transparency and non-financial reporting covered in the Grenelle II law (publication in the management report of information relating to social impacts – organisation of work, labour relations, diversity, etc.). Note that after audit and verificationby the statutoryauditors, Groupamasuccessfullyobtained for 2019 (like the previous year) a certificateof participationas wellas an attestation of sincerity.

Strategy 3.4.1.1 GroupamaAssurancesMutuelles is the central body of Groupama. As such, it is in charge of defining and coordinating the implementation of the Group’strategy in the companies: the Group’s medium-termand long-term strategic focuses are ● determined bythe managing bodies; they are implementedin the short or mediumterm in accordance ● with a Group Strategic and Operational Planning (“SOP”) process. The SOP involves the developmentof provisionalcorporateincome statements, IFRS financial statements and analytical results by business line for each entity. It is broken down into operational action plans pertaining to annual performance targets and thus constitutes the path for the period of the plan and the Group elementsof reference for managing the ntities. The strategicplan is defined for a period of three years. On the France scope, the national consolidation of objectives is approved bythe Group’sexecutivebodies. Internationally, each subsidiary develops its OSP just like the Group’s other entities, submitted to the International Subsidiaries Department and theGroup’s Executive Management for validation. Human Resources (HR) 3.4.1.2 The responsibilitiesof the Group HR Departmentcover three main areas: corporate activities: implementation of Group policies, ● coordinationof HR networks,support and advice for companies and dialogue between workforce and management with the EuropeanWorks Council, the Group Committee,and the UDSG (Groupama Social Development Unit), in a Group structure in which each company (around forty) has a Human Resources Department in charge of HR management and employee relations under theauthority of a Chief Executive Officer. In order to promote the establishmentof corporate policies and the implementation of control and compliance systems, the Group HR Department relies on an HR Operational Committee made up of the HR Departments of the Group’s French companies (Groupama Assurances Mutuelles, subsidiaries and regional mutuals). The Group HR Department is also in charge of employee relationswithin the UES (Economicand Social Unit), with the aim of managingall information/consultationprocessesrelatingto the projects and activities of its member companies (Groupama AssurancesMutuelles,GroupamaGan Vie, Gan Patrimoine,Gan Prévoyance, GroupamaSupportset Services, Gan Assurances); activities related to the HR Department of the “company” ● Groupama Assurances Mutuelles involving internal checks to ensure that labour laws and regulations are properly enforced: compliance with legal and contractual obligations related to industrial dialogue, human resources development(diversity and non-discrimination, etc.), and to employment contracts,

3.4.2

INTERNAL CONTROL ORGANISATION AT THE GROUP LEVEL

Internal control is a mechanism that the Group implements to guarantee: the application of instructions and guidelines set by Executive ● Management or the Management Board; compliancewith the laws and regulations,local rules and codes ● of conductrelatingto the businessescarried outby the Group; the properfunctioningof the internalprocessesand rules of each ● company, particularly those contributing to the safeguarding of the Group’sassets; the reliabilityof financial data; ● the control of risks of any nature to which each company is ● exposed; and, in general, contribute to the control of its activities, the ● effectiveness of its operations and the efficient use of its resources. Beyond compliance with the regulatory obligations, the implementationof an internal control systemconstitutesa strategic issue for Groupamaessentialto the preservationof its interests,the interests of its customers, partners, members and shareholders, and the interestsof its staff or even its existence in case of a major event. In this context, the general principles, objectives, and organisation of internal control of the Group and Groupama Assurances Mutuelles were defined in a policy approved by the Board of Directors of Groupama Assurances Mutuelles in 2015. For the Group’sentities,this policy constitutesthe commonreferenceto be respected in the deployment of their internal controlprocesses. As auditing is part of the internal control procedure, a Group and Groupama Assurances Mutuelles audit policy supplements the provisionsof the internal control policy with its own operating rules and scope of operation. Risk management policies as well as a compliance policy, defining the overall framework for implementationand operation of the compliancesystemwithin the Group, completethe general internal control system.

58 Universal Registration Document 2019 - GROUPAMA ASSURANCES MUTUELLES