ING Direct 2009 Annual Report Download - page 203

ING Group
The heads of these departments (Corporate Risk General Managers) report to the CRO and bear direct responsibility for risk (mitigating)
decisions at the Group level. The Corporate Risk General Managers and the CRO are responsible for the harmonisation and standardisation
of risk management practices.
In addition two staff departments report to the CRO:
The Risk Integration and Analytics department is responsible for inter-risk aggregation processes and for providing group-wide risk •
information to the CRO and Executive Board
The Model Validation department. This department carries out periodic model validations of all material risk models used by ING. •
To ensure independence from the business and the other risk departments, the head of this department reports directly to the CRO.
Group Risk Committees
The Group risk committees described below are also part of the second line of defence. They act within the overall risk policy and
delegated authorities granted by the Executive Board and have an advisory role to the CRO. To ensure a close link between the business
lines and the risk management function, the business line heads and the respective Corporate Risk General Managers are represented
on each committee (except for the Operational and Residual Risk Committee where the business is not represented).
ING Group Credit Committee – Policy (GCCP): Discusses and approves policies, methodologies and procedures related to credit, •
country and reputation risks within ING Group. The GCCP meets on a monthly basis
ING Group Credit Committee – Transaction Approval (GCCTA): Discusses and approves transactions which entail taking credit risk •
(including issuer investment risk). The GCCTA meets twice a week
ING Group Investment Committee (GIC): Discusses and approves investment proposals for ING Real Estate. The GIC meets on a •
monthly basis
Asset and Liability Committee ING Bank (ALCO Bank): Discusses and approves the overall risk profile of all ING Bank’s market risks that •
occur in its Commercial Banking, Retail Banking and ING Direct activities. ALCO Bank defines the policy regarding funding, liquidity,
interest rate mismatch and solvency for ING Bank. ALCO Bank meets on a monthly basis
Asset and Liability Committee ING Insurance (ALCO Insurance): Discusses and approves all risks associated with ING’s Insurance activities. •
This includes volatility (affecting earnings and value), exposure (required capital and market risk) and insurance risks. ALCO Insurance
meets ten times a year
Operational and Residual Risk Committee (ORRC): Discusses and approves issues related to Methods, Models and Parameters related •
to Operational risk, Business risk in Banking, inter-risk diversification and consistency across risk types and businesses. The committee
meets at least twice a year.
In addition, the Finance and Risk Committee (F&RC) is a platform for the CRO and the CFO, along with their respective direct reports, to
discuss and decide on issues that relate to both the finance and risk domains. After the Back to Basics initiative was launched in April 2009,
the Finance & Risk Committee was split into a F&RC Bank and F&RC Insurance, in line with the strategy to manage the Bank and Insurance
separately. At least on a quarterly basis there is also a F&RC Group meeting, covering specific Group issues.
ING Group uses risk assessment and risk measurement to guide decision making. As a result, the quality of risk models is important. The
governance process for approval of risk models, methods and parameters ensures business and regulatory requirements, via a clear
assignment of responsibility and accountability.
Board level risk oversight
ING Group has a two-tier board structure consisting of the Executive Board and the Supervisory Board; both tiers play an important role
in managing and monitoring the risk management framework. At the highest level of the ING organisation, there are board committees
which oversee risk taking, and have ultimate approval authority.
The Executive Board is responsible for managing risks associated with the activities of ING Group. Its responsibilities include ensuring •
that internal risk management and control systems are effective and that ING Group complies with relevant legislation and regulations.
On a regular basis, the Executive Board reports on these issues and discusses the internal risk management and control systems with the
Supervisory Board. On a quarterly basis, the Executive Board reports on the Group’s risk profile versus its risk appetite to the Audit
Committee, explaining changes in the risk profile.
The Supervisory Board is responsible for supervising the policy of the Executive Board, the general course of affairs of the Company and •
its business (including its financial policies and corporate structure). The Supervisory Board has several sub-committees related to specific
topics. Of these, two sub-committees are relevant for the risk management organisation and risk reporting, which are:
The Audit Committee, which assists the Supervisory Board in reviewing and assessing ING Group’s major risk exposures and the •
operation of internal risk management and control systems, as well as policies and procedures regarding compliance with applicable
laws and regulations.
The Risk Committee, which assists the Supervisory Board on matters related to risk governance, risk policies and risk appetite setting. •
The committee was established in 2009. It reports in the Supervisory Board on the main risk issues in the group.
2.1 Consolidated annual accounts
Risk management (continued)
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