RISK FACTORS AND INTERNAL CONTROL an Ethics Guide, translated into the local languages • Reviewing the existing procedures and identifying of the countries where the Group operates. In 2013, the procedures to be set up to control such risks the Ethics Guide was updated in order to reflect within the Group; the values promoted through the Group’s strategy and again in 2017 to reflect the applicable legal and • Ensuring the coordination and coherence of the regulatory requirements and to include a new alert above procedures and the above plans; and procedure. However, its deployment wil l not be More specifically, ensuring the implementation of • effective until 2018. the Risk Management Policy. Besides, the Board of Directors approved on May 22, The Risk Committee met three times in 2017. The 2014, and updated on February 10, 2017, its Insider Risk Committee reported on its work and made Trading Policy (the “Policy”) initial ly approved in recommendations twice to the Audit and Risk 2007, in order to comply with the general regulation Committee, and once to the Executive Committee of the AMF. This Policy reiterates the applicable during this financial year. In order to reinforce the regulations relative to the risks of having, disclosing operational orientation of the Risk Committee, the or potential ly using inside information (it being Risk Committee is chaired by the CEO of a subsidiary specified that inside information is a “specific piece of Rexel since the end of 2016. of information that has not been released to the public, directly or indirectly, concerning Rexel or The Head of Risk Management is in charge of: the Rexel Group, or one or more Rexel Securities Defining, deploying and coordinating the Rexel • and which, if it were to be made public, could have Risk Management approach, under the oversight a significant impact on the market price of Rexel of the Risk Committee, and especially identifying Securities”). This Policy specifies in particular the and prioritizing operational and non-compliance terms and conditions for the establ ishment of risks; insiders lists in case of inside information. • Providing support to risk owners in risks analysis, In accordance with the AMF recommendations definitions of recommendations, and action plans relating the “Market Abuse” regulation (European fol low-up aiming at preventing and dealing with regulation n°596/2014 of April 16, 2014), the Policy the risks; and has been supplemented by an internal procedure relating to the qualification and the management of • Enhancing the Group’s Risk Management and inside information (the “Procedure”). The Procedure compl iance culture through communication establ ishes an internal ad hoc committee which activities. is in charge of assessing whether the information submitted to it should be treated as inside 2.3.2.1 Risk identification and assessment information, and implements an inside information The Audit and Risk Committee has an overall view on processing internal system. The Procedure has been Rexel Group risks through the risk mapping set by the presented to the Board of Directors of October 26, Executive Committee upon the recommendations 2017, following an examination by the Audit and Risk of the Risk Committee. It is kept informed by the Committee held on the same day. Director of Internal Audit, the chairman of the Risk Committee and by the functionaldirectors on 2.3.2 Risk management system various risks that are specific to their field. The major risks identified are presented regularly to the Audit The risk management system relies on the diligence and Risk Committee. of the Risk Committee, which reports to the Executive Committee. The Risk Committee’s duties Under the supervision of the Risk Committee, the include, in particular: Head of Risk Management carries out annual ly the process of updating this mapping based on Managing the annual update of the Group’s risk interviews with members of the Risk Committee, • mapping and the on-going identification of risks; the Group’s Executive Committee and a panel of operational specialists. Risk mapping is also carried •Identifying “risk owners”,determining the out every year on selected entities to deploy the related action plans and the fol low-up on the approach local ly and to improve, if needed, risk implementation of these plans; mapping at the Rexel Group level. REXEL 2017 – REGISTRATION DOCUMENT 48