Groupe Renault - 2019 Universal Registration Document

01

INTERNAL CONTROL AND RISK MANAGEMENT GROUPE RENAULT

Bodies and actors involved in internal control and risk management The RCI Banque Board of Directors, as supervisory body, has the P following responsibilities: it decides on the bank’s business strategy and monitors the P implementation, by Executive Directors and the Executive Committee, of supervisory procedures to ensure effective and prudent management, it approves and periodically reviews the strategies and policies P for taking on, managing, monitoring and reducing risk, it examines the governance model, periodically assesses its P effectiveness, and ensures that corrective action is taken to remedy any shortcomings, it oversees the publication and communication processes and P checks the quality and reliability of information due to be published and disclosed by the Company. As such, the Board devotes at least one meeting a year to a review of the internal control system, in order to sign off on the annual report on internal control submitted to the French Prudential Supervisory Authority (ACPR). The Board of Directors is assisted in its duties by five specialized committees: the Audit and Accounts Committee meets three times a year. It P is responsible for preparing, presenting and monitoring the financial statements, overseeing the statutory audit of the separate and consolidated financial statements, monitoring the independence of the statutory auditors and the definition of their non-auditing services, recommending the appointment of the statutory auditors and monitoring their rotation, verifying the effectiveness of internal control and risk management systems, reviewing the audit plan, analyzing the audits carried out and reviewing investments in unconsolidated companies, the Risk Committee meets four times a year. Its role includes P examining the risk map and signing off on the definition of risks, and analyzing and authorizing RCI group risk limits in line with the Board’s risk appetite and with a view to assisting the Board in terms of oversight. It is also responsible for analyzing action plans in the event that limits or notification thresholds are exceeded, and for examining pricing systems for products and services. In parallel with the Compensation Committee, it also has the task of examining whether the compensation policy is compatible with the Company’s risk exposure, So that it can advise the Board of Directors, this Committee is also responsible for the analysis and approval of the internal control report, compliance with capital (ICAAP) and liquidity (ILAAP) regulations, the recovery plan, and significant aspects of the rating and estimating processes derived from the Company’s internal credit risk models, the Compensation Committee meets at least twice a year. It P examines the compensation policy for company officers and the Head of Risk Management annually and prepares decisions for the Board of Directors regarding the compensation of individuals who have an impact on risk and risk management,

the Compensation Committee meets at least twice a year. It has P the task of recommending directors to the Board of Directors. It is also in charge of the annual review of the Board of Directors, including its structure, membership, gender diversity and breadth of directors’ knowledge, skills and experience. It submits nominations to the Board for Executive Directors, the Chief Executive Officer, Deputy Chief Executive Officers and the holders of key positions, the Strategy Committee meets at least four times a year. Its P role is to analyze the roll-out of the strategic plan, as well as reviewing and signing off on various strategic projects and challenges. The Executive Committee, the group’s Senior Management body, P directs the RCI Banque’s policy and strategy. The Senior Management relies on the following committees to oversee the Group’s risk management: the Financial Committee, which reviews the following topics: P economic analysis and forecasts, cost of funds, liquidity risks, interest rate risk and counterparty risk in the different areas and subsidiaries of the group. The balance sheet and income statement of RCI Holding are also analyzed to make the necessary adjustments to intra-Group transfer pricing, the Credit Committee, which approves commitments exceeding P the authorization limits of subsidiaries and the Group Head of Commitments, the Performance Committee, for “Customer and Network P Risks”, which evaluates the quality of customer origination and benchmarks subsidiaries’ performance in terms of recovery. Within the dealership network, changes in the outstanding portfolio and inventory turnover are reviewed, together with changes in dealer and portfolio classification, the Regulatory Committee, which reviews major regulatory P changes, prudential supervision and action plans, and validates internal rating models and the associated management policy, the Internal Control, Operational Risk and Compliance P Committee, which oversees the group’s entire internal control system, monitors quality and related procedures, and adapts resources, systems and procedures. It defines, manages and monitors the principles of the operational risk management policy and compliance control system. It also keeps track of action plans. This committee also exists within each RCI Banque group subsidiary, the New Product Committee, which approves new products P before they are marketed, by ensuring the compliance of the new products with the group’s commercial policy, the group’s budget requirements, locally applicable legislation, and group risk governance; Process owners have been appointed for each macroprocess and P are responsible for risk management in their respective areas of expertise in line with group standards, defining and updating the corresponding procedures and first-level controls.

96 GROUPE RENAULT I UNIVERSAL REGISTRATION DOCUMENT 2019

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