2007 REGISTRATION DOCUMENT

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2 ReportCORPORATE GOVERNANCEof the Chairman of the Board of Directors on the conditions for the preparation and organisationof the work of the Board and on internal control procedures implemented by BNP Paribas< Contents >Detailed and individual information on the remunerationpolicy for corporate officers is provided in section 2.1 of theRegistration Document which also refers to the AFEP-MEDEFrecommendations of January 2007 on the remuneration ofcorporate officers of listed companies.Share issue reserved for employees: newlegislation concerning employee incentiveschemes■The Board of Directors approved the terms and conditions of anew share issue reserved for employees and authorised an exceptionalpayment of additional collective profit-related bonuses for 2006 inaccordance with Act no. 2006.1770 of 30 December 2006.7. FINANCIAL STATEMENTS COMMITTEE■ The Financial Statements Committee was set up in 1994 and mostof its members have extensive experience and expertise in theareas of corporate financial management, accounting and financialinformation. In 2007, its membership was unchanged from theprevious year and included Louis Schweitzer (Chairman), PatrickAuguste, Denis Kessler and Hélène Ploix.■ The composition of the Committee (1) complies with French corporategovernance guidelines which recommend that at least two-thirds ofthe directors must be independent. No members of the Bank’s ExecutiveManagement sit on the Committee. Its duties and modus operandi areset out in the Board’s Internal Rules, which are periodically updated toreflect changes in legislation, regulations and best practices (2) .■ To ensure that the Committees’ knowledge remains fully up to date, itsmeetings include briefings on key issues, which are then examined anddiscussed in the presence of the Statutory Auditors. The informationpresented can be rounded out by meetings with managers of Groupfunctional and operating units, organised by the Board’s supportstaff for any Committee members who express a need for furtherclarification.■ The Committee met four times in 2007 and the rate of attendance was100%. Documentation on agenda items – presented in standardisedform – was distributed on average three to four days prior to eachmeeting, in line with French corporate governance guidelines.Review of the financial statementsand financial information■In accordance with the Board’s Internal Rules, in 2007 the Committeereviewed the financial statements based on the documents andinformation provided by Executive Management and the verificationprocedures carried out by the Statutory Auditors. In doing so, it verifiedthe relevance and consistency of accounting methods used in drawingup the Bank’s consolidated and corporate accounts. The Committeereviewed management accounting data by core business and reviewedthe impact of changes in the scope of consolidation. It was briefedby the Head of Group Finance-Development on changes in balancesheet and off balance sheet items between 31 December 2005 and31 December 2006.■ It reviewed draft press releases concerning the Group’s results priorto their presentation to the Board.■ It prepared the work and deliberations of the Board by scrutinisingissues requiring particular attention, inter alia the Group’s provisioningpolicy and the procedures used to determine the results of capitalmarkets transactions which were discussed in the presence of theStatutory Auditors.■ The joint meeting of the Financial Statements Committee and theInternal Control, Risk Management and Compliance Committeemainly discussed developments in the financial crisis that beganin the summer of 2007 and the Group’s policy for setting asideprovisions for credit risk. The meeting examined a joint memorandumsubmitted by the Heads of Group Finance-Development and GroupRisk Management.■ The Committee listened to a presentation from Group Finance-Development and the Statutory Auditors concerning key electionsfor the application of accounting standards and was briefed on thenature and impact of each of these elections on the Group’s results.■ When reviewing the financial results for each quarter or in the courseof its discussions of specific issues, the Committee interviewedthe Head of Group Finance-Development and the Head of GroupAccounting. During its review of the 2006 financial statements and ofthe results for the first nine months of 2007, it interviewed the Headof Group Finance-Development, without any member of ExecutiveManagement being present.■ When reviewing the financial results for each quarter, the Committeelistened to the comments and findings of the Statutory Auditors,without any member of Executive Management being present.■ The Committee was briefed – in the presence of the StatutoryAuditors – on the accounting internal control points identified aspart of the process of certifying the quarterly consolidation reportingpackage.■ The Committee reviewed the draft report of the Chairman of theBoard on internal control procedures relating to the preparation andprocessing of accounting and financial information, and recommendedit for adoption by the Board.■ At the end of each meeting, the Financial Statements Committeereported its findings to the Board of Directors, so as to providethe latter with full information and facilitate its deliberations anddecision-making.Relations with the Group’s Statutory Auditors (3)■The Committee received from each of the Statutory Auditors awritten statement of its independence vis-à-vis the conduct of theengagement.12345678910(1) AFEP-MEDEF 2003 (14.1).(2) AFEP-MEDEF 2003 (14.2).(3) AFEP-MEDEF 2003 (14.2.2).11502007 Registration document - BNP PARIBAS
CORPORATE GOVERNANCEReport of the Chairman of the Board of Directors on the conditions for the preparation and organisation 2of the work of the Board and on internal control procedures implemented by BNP Paribas< Contents >■ In the absence of the Statutory Auditors, it received notification ofthe amount, calculated by Executive Management, of fees paid by theBNP Paribas Group to the Statutory Auditors in 2007. Based on theinformation collected by Executive Management, it ensured that theamount or portion represented by BNP Paribas in the overall revenuesof the audit firms and the networks to which they belong was notlikely to compromise the Statutory Auditors’ independence.■ The Committee reviewed and approved engagements not directlyrelated to auditing on an as-needed basis.1Extracts from the Board of Directors’ Internal Rules: the Financial Statements Committee2“The Committee shall hold at least four meetings per year.CompositionAt least two-thirds of the members of the Financial StatementsCommittee shall qualify as independent directors based on the definitionused by the Board in accordance with French corporate governanceguidelines.No members of the Bank’s Executive Management shall sit on theCommittee.Terms of referenceThe Committee is tasked with analysing the quarterly, half-yearly andannual financial statements issued by the Bank and obtaining furtherexplanations of certain items prior to presentation of the financialstatements to the Board of Directors.The Committee shall examine all matters related to the financialstatements, including the choices of accounting principles andpolicies, provisions, management accounting data, capital adequacyrequirements, profitability indicators, and all other accounting mattersthat raise methodological issues or give rise to potential risks.Relations with the Group’s Statutory AuditorsThe Committee shall steer the procedure for selection of the StatutoryAuditors, express an opinion on the amount of fees charged forconducting the statutory auditing engagements and report to the Boardon the outcome of this selection process.It shall review the Statutory Auditors’ audit plan, together withthe Auditors’ recommendations and the implementation of theserecommendations.It shall be notified on a yearly basis of the amount and breakdown ofthe fees paid by the BNP Paribas Group to the Statutory Auditors andthe networks to which they belong, calculated using a model approvedby the Committee. It shall ensure that the portion of the audit firms’revenues that BNP Paribas represents is not likely to compromise theStatutory Auditors’ independence.Its prior approval shall be required for any engagement entailing totalfees of over EUR 1 million (before tax). The Committee shall approve onan ex post basis all other engagements, based on submissions from theGroup Finance-Development Department. The Committee shall validatethe Group Finance-Development Department’s fast-track approval andcontrol procedure for all “non-audit” assignments entailing fees of overEUR 50,000. The Committee shall receive on a yearly basis from theGroup Finance-Development Department a report on all “non-audit”engagements carried out by the networks to which the Group’s StatutoryAuditors belong.Each Statutory Auditor shall report on a yearly basis to the Committeeon its internal control mechanism for guaranteeing its independence,and shall provide a written statement of its independence in auditingthe Group.At least twice a year, the Committee shall devote part of a meeting toa discussion with the team of Statutory Auditors, without any memberof Executive Management being present.The Statutory Auditors shall attend the Committee meetings devoted tothe review of quarterly, half-yearly and annual financial statements.However, the Statutory Auditors shall not attend all or part of Committeemeetings dealing with their fees or their re-appointment.The Statutory Auditors shall not attend all or part of Committee meetingsdealing with specific issues that concern a member of their staff.Barring exceptional circumstances, the files containing the quarterly,half-yearly and annual results and financial statements shall be sentto Committee members at the latest on the Friday or Saturday morningpreceding Committee meetings scheduled for the following Mondayor Tuesday.Where questions of interpretation of accounting principles arise inconnection with the publication of quarterly, half-yearly and annualresults, and involve choices with a material impact, the StatutoryAuditors and the Group Finance-Development Department shall submit,on a quarterly basis, a memorandum to the Committee analysing thenature and significance of the issues at play, presenting the pros andcons of the various possible solutions and explaining the rationale forthe choices ultimately made.Report of the ChairmanThe Committee shall review the draft report of the Chairman of theBoard on internal control procedures relating to the preparation andprocessing of accounting and financial information.InterviewsWith regard to all issues within its purview, the Committee may, asit sees fit, and without any other member of Executive Managementbeing present if it deems this appropriate, interview the Heads ofGroup Finance and Accounting, as well as the Head of Asset/LiabilityManagement.The Committee may request an interview with the Head of GroupFinance-Development with regard to any issue within its purview forwhich it may be liable, or the Bank’s management may be liable, or thatcould compromise the quality of financial and accounting informationdisclosed by the Bank.Common provisionsThe Internal Control, Risk Management and Compliance Committee andthe Financial Statements Committee shall hold a joint meeting at leastonce a year in order to discuss matters affecting both risk managementpolicy and the provisions to be set aside in the books of BNP Paribas. Thismeeting shall be chaired by the Chairman of the Financial StatementsCommittee.345678910112007 Registration document - BNP PARIBAS 51
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5 StatutoryCONSOLIDATED FINANCIAL S
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6INFORMATION ON THE PARENT COMPANY
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