ING Direct 2013 Annual Report Download - page 250

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 SB is responsible for supervising the policy of the MBB, the general course of affairs of the Company and its business (including its
financial policies and corporate structure). For risk management purposes the SB is assisted by two sub-committees:
– The Audit Committee, which assists the SB in monitoring the integrity of the financial statements of ING Bank, in monitoring the
compliance with legal and regulatory requirements, and in monitoring the independence and performance of ING’s internal and
external auditors; and
– The Risk Committee, which assists the SB on matters related to risk governance, risk policies and risk appetite setting.
• The 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 SB. On a quarterly
basis, the MBB reports on the Bank’s risk profile versus its risk appetite to the Risk Committee, explaining changes in the risk profile.
The Chief Risk Officer 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 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 MBB
formulates the Strategic Plan which is submitted to the SB for approval.
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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
248 ING Group Annual Report 2013