ING Direct 2011 Annual Report Download - page 220

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1st line of defence 2nd line of defence 3rd line of defence
Supervisory Board
Risk Committees
GCC(P)
ALCO Bank
GCC(TA)
BU Line Management,
Regional & Local
Managers
Internal Audit
Management Board Bank CRO
Local and Regional Risk Committees
Bank Risk Management Function
Regional and BU Risk Managers
Non Financial Risk Committee
Bank Finance & Risk Committee
SB LevelExecutive Level
Regional and BU Level
2-tier board structure
Risk CommitteeAudit Committee
Risk management continued
ING Bank
Board level risk oversight
ING Bank has a two-tier board structure consisting of the Management Board Bank and the Supervisory Board; both tiers play an
important role in managing and monitoring the risk management framework.
• The Supervisory Board is responsible for supervising the policy of the Management Board Bank, the general course of affairs of the
Company and its business (including its financial policies and corporate structure). For the risk management purposes the Supervisory
Board is assisted by two sub-committees:
– The Audit Committee, which assists the Supervisory Board in reviewing and assessing ING Bank’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; and
– The Risk Committee, which assists the Supervisory Board on matters related to risk governance, risk policies and risk appetite setting.
• The Management Board Bank (MBB) is responsible for managing risks associated with the activities of ING Bank. The MBB’s
responsibilities include ensuring that internal risk management and control systems are effective and that ING Bank complies with
relevant legislation and regulations. On a regular basis, the MBB reports on these issues and discusses the internal risk management and
control systems with the Supervisory Board. On a quarterly basis, the MBB reports on the Bank’s risk profile versus its risk appetite to
the Audit Committee, explaining changes in the risk profile.
The Chief Risk Officer (CRO) ensures that the boards are well informed and understand ING Bank’s risk position at all times. Every quarter,
the CRO reports to the board committees on ING Bank’s risk appetite levels and on ING Bank’s risk profile. In addition the CRO briefs the
board committees on developments in internal and external risk related issues and ensures the board committees understand specific
risk concepts.
As part of the integration of risk management into the annual strategic planning process, the MBB issues a Planning Letter which
provides the organisation with the corporate strategic direction, and addresses key risk issues. Based on the Planning Letter, the business
lines and business units develop their business plans which align with the Bank’s strategic direction. The process includes a qualitative
and quantitative assessment of the risks involved. As part of the process strategic limits and risk appetite levels are explicitly discussed.
Based on the business plans, the Management Board Bank formulates the Strategic Plan which is submitted to the Supervisory Board
for approval.
218 ING Group Annual Report 2011