SFIL Annual financial report 2018

2 I Report on corporate governance 46 SFIL Annual Financial Report 2018 •  the medium-term IT strategy and the deployment of the new Technology and Organization division; •  risks, in particular the review for approval of the ICAAP-IL- AAP reports and the updating of the backup recovery plan in accordance with the banking supervision requirements; •  financial statements, the new IFRS 9 standard and its impact on the 2019 budget; •  the plan to change the Company’s shareholder structure; •  governance, in particular the corporate governance report, the review of the Board's functioning based on an analy- sis carried out by external consultants, the replacement of certain members of the Board of Directors, including those resulting from the election of members of the Board of Directors representing employees, and the change in composition of the specialized committees; •  the opinion of the works council on strategic orientations; •  compensation for managers and salary measures at the Company as well as Board attendance fees; •  the formalization of the SFIL Group’s internal governance policy and the procedure for appointing or reappointing corporate officers; •  the review of regulated agreements. Based mainly on the reports submitted by the chairs of the Board’s specialized committees (see the section below on the work of these committees), it discussed the various reports on risks (major risk maps, report on risk monitoring, Pillar 3 report, etc.), internal control and compliance (includ- ing AML-CFT and market abuse provisions). In addition, the Board of Directors was informed of the interventions by supervisors as well as the responses made to the recommendations of the latter by the Company’s management. Finally, the Board convened an Ordinary Shareholders’ Meeting for May 29, 2018. The purpose of the Ordinary Shareholders’ Meeting was to approve the Company and consolidated financial statements, appropriation of earnings, approve regulated agreements, set the amount of Board attendance fees, offer an opinion on the overall budget for compensation and compensation components of the Chair of the Board and Chief Executive Officer, the ratification of appointment of three members of the Board of Directors. An internal rulebook, updated in March 2018, defines the operation of the Company’s Board of Directors. More spe- cifically, the aim of these rules is to present the manner in which the Board of Directors can best assume its role as guardian of the common interests of all the Compa- ny’s stakeholders, including in particular its shareholders, employees and partners. It lists the rights and responsibil- ities of the members of the Board of Directors, including conflict of interest rules. The Board of Directors meets at least once each quarter. In 2018, the Board of Directors therefore met six times. The attendance rate by members was 95.56%. The Chair of the Board of Directors provides Board mem- bers with all information, particularly of a strategic nature, that they may need to perform their duties properly. Prior to the meeting, members of the Board of Directors receive an agenda and a file containing memoranda and documents related to the agenda. During Board meetings, General Management presents the activity and accounts of the previous period (or the financial position if there is no accounts closure) and an update of the main projects under way within the Company or impor- tant issues it may face. The Board is also periodically asked to review the deliberations of the Company’s specialized committees. In 2018, the Board of Directors focused on the following matters in particular: •  the bond issuance strategy of SFIL, as well as of its sub- sidiary Caisse Française de Financement Local (CAFFIL); •  the local public sector strategy; •  the strategy relating to the export credit market and the potential extension of this activity's scope in connection with the decision announced by the French prime minis- ter on February 23, 2018 that the public credit insurance system should supports projects representing a strategic interest for French industry; •  completion of the structured loan sensitivity reduction program; •  services provided to its subsidiary CAFFIL as well as those performed on behalf of La Banque Postale; •  implementation of the information system simplification program, notably by switching a large part of the IT sys- tem to a new information system;