Groupe Renault - 2020 Universal Registration Document

99 GROUPE RENAULT I UNIVERSAL REGISTRATION DOCUMENT 2020 01 INTERNAL CONTROL AND RISK MANAGEMENT GROUPE RENAULT GROUPE RENAULT: A COMPANY THAT ACTS RESPONSIBLY CORPORATE GOVERNANCE FINANCIAL STATEMENTS RENAULT AND ITS SHAREHOLDERS ANNUAL GENERAL MEETING OF RENAULT ON APRIL 23, 2021 ADDITIONAL INFORMATION The risk management system covers all the macroprocesses of the RCI Banque group and includes the following tools: the list of the main so-called critical and significant risks for which P a pilot, appetite level, alert thresholds and limits are defined (Risk Appetite Framework). For each risk, a detailed analysis is performed that identifies the components of the risk and the management and oversight principles that keep it in line with the risk appetite level. These elements are reviewed at least once a year in connection with the RCI Banque group business model and strategy; the mapping of operational management rules contributes to risk P management; it is deployed in all of the RCI Banque group’s consolidated subsidiaries. This mapping is updated regularly by the central business activity departments. The level of control of operational management rules is assessed annually by the process owners in all subsidiaries; the incident collection database helps to identify malfunctions P that correspond to predefined criteria and enables the corrective and preventive measures required to control risks to be put in place. This database is used for internal and regulatory reporting purposes. The system sets thresholds for immediately communicating incidents to RCI Banque’s Executive Committee, RCI Banque’s Board of Directors, Groupe Renault’s Ethics and Compliance Committee (CEC), the French Prudential Supervisory Authority (ACPR) and the European Central Bank. Bodies and actors involved in RCI Banque's internal control and risk management The RCI Banque Board of Directors, as supervisory body, has the 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 for P 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 four specialized committees: 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 Audit and Accounts Committee meets three times a year. It is P responsible for preparing, presenting and monitoring the financial statements, overseeing the statutory audit of the separate and consolidated financial statements, monitoring the independence 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 Appointments 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 Executive Committee, the group’s Senior Management body, 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 Risks”, P 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;