The Committee supports the Board of Directors on risk and internal audit-related systems.
Among other things, the Committee:
a) Drawing on input from the Corporate Governance, Nomination and Sustainability Committee, identifies and proposes to the Board who should be appointed Head of Group Compliance, Internal Audit and Group Risk Management; issues its opinion on setting remuneration for the Head of Internal Audit in line with company policy;
b) In advance, examines activity programmes (including the audit plan) and annual reports from Group Compliance, Internal Audit and Group Risk Management destined for the Board, as well as periodical reports prepared by these functions above and beyond legal or regulatory requirements;
c) Evaluates and issues opinions to the Board on compliance with the principles pursuant to which the internal audit and corporate organizations system must be harmonized, and the requirements that must be complied with by the Group Compliance, Internal Audit and Group Risk Management functions, drawing the Board's attention to any weaknesses and consequent corrective actions to be implemented; for this purpose, it assesses proposals put forward by the CEO;
d) Through valuations and opinions, contributes to defining company policy on the outsourcing of the corporate control functions;
e) Verifies that the Group Compliance, Internal Audit and Group Risk Management functions correctly comply with the Board's indications and guidelines, assisting the Board in drafting the coordination documents envisaged under Circular no. 285 issued by the Bank of Italy;
f) Examines and assesses the correct use of accounting principles and their uniformity with regard to drafting the main accounting documents (such as, by way of example, operating and consolidated financial statements, interim operating reports, etc.), for this purpose coordinating with the Manager in charge of drafting the company financial reports and the Board of Statutory Auditors;
g) Examines the work carried out by the Group external auditor and the results stated in their reports and any letters and suggestions;
h) Assesses any findings that may emerge in reports from Internal Audit and Group Compliance, or from the Board of Statutory Auditors and Group companies or from enquiries and/or investigations carried out by third parties;
i) May seek specific audit interventions, at such time informing the Chairman of the Board of Statutory Auditors;
j) Analyses Group guidelines for the Group Compliance function that fall within its sphere of competence, monitoring that they have been adopted and implemented;
k) Requests that the Head of Internal Audit draft any proposals for the qualitative and quantitative improvement of the function itself.
With a special focus on risk management and control-related issues, the Committee offers a support function to the Board of Directors in:
- Defining and approving strategic orientations and risk governance policies with special reference to risk appetite and risk tolerance. For this purpose, it also examines the annual budget drafting guidelines;
- Verifying that risk strategies, governance policies and the Risk Appetite Framework (RAF) have correctly been implemented;
- Defining policies and processes for evaluating corporate activities, including verification that the price and conditions of client operations comply with the risk-related business model and strategies.
Without prejudice to the competencies of the Remuneration Committee, the Committee checks that the incentives underlying the remuneration and incentives system comply with the RAF, particularly taking into account risks, capital and liquidity.
Moreover, the Committee reports to the Board of Directors on the status and effectiveness of the Group's internal controls system.
The Committee Chairman maintains close relations with the Chairmen of the Risks and Audit Committees of the major Group Companies.