The Committee supports the Board of Directors on risk management and control-related issues.
Among other things, the Committee:
a) With the support of the Corporate Governance, Nomination and Sustainability Committee, identifies and proposes to the Board who should be appointed as Head of the corporate control functions or assesses the evaluation of their dismissal; for the Head of Internal Audit function, issues its opinion on setting the remuneration and the performance goals associated with its variable portion in line with the company policies;
b) Pre-examines activity programmes (including audit plans) and annual reports from corporate control functions to be sent to 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 the compliance of the internal control system and corporate organization with the applicable rules and regulations, and on the requirements that must be complied with by the corporate control 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 evaluations and opinions, contributes to defining company policy on the outsourcing of corporate control functions;
e) Verifies that the corporate control functions correctly comply with the Board's recommendations and guidelines, assisting the Board in drafting the coordination documents envisaged under Bank of Italy Circular no. 285;
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 with the Board of Statutory Auditors;
g) Examines the work carried out by the Group's external auditors and the results stated in their reports or any letters and suggestions;
h) Assesses any findings reported by Internal Audit and Group Compliance, or that may arise 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 remit, 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;
l) Is involved, within its specific remit, in the process of identifying material risk takers on an on-going basis.
With a special focus on risk management and control-related issues, the Committee supports the Board of Directors in:
- Defining and approving strategic guidelines and risk management policies with specific reference to risk appetite and risk tolerance. For this purpose, it also examines the annual budget drafting guidelines;
- Verifying that risk strategies, management policies and the Risk Appetite Framework (RAF) have been correctly implemented;
- Defining policies and processes for evaluating corporate activities, including verification that the price and conditions of client transactions 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 incentive 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 of the Group's internal control system.
Furthermore, as regards investments in non-financial equities, the Committee assesses, supports and puts forward proposals with regard to organizing and enacting internal controls on the making and managing of equity investments in non-financial companies, in addition to verifying compliance within the framework of such equity investments in terms of strategic and operational guidelines.