GROUP OVERVIEW 1 Internal control and risk management In addition, the software solution developed by the Group’s > A talent review conducted at relevant levels of the organisation to Maintenance Department on building and technical aspects (see the identify and support the development of staff members who may following section) is being upgraded to include an add-in to assess occupy key positions in the Group and monitor the risks. > A considered mobility policy included in the commitment to personalised support of talented employees 1.9.4 Control measures addressing > A long-term investment in training open to all employees to major risks assist their employability, share know-how, efficiently integrate new arrivals and a collective ability to manage new operating Please refer to the section 1.8 “Main risk factors” for the risks the group challenges effectively, and is exposed to. Measures taken to control those mentioned risks are > Tools promoting a quality work environment such as training on described below. health at work, measures to ensure the right balance between career and personal life and widespread initiatives for well-being at work. 1.9.4.1 Investments The Group human resources strategy is outlined in section 4.4.3 All proposals to acquire, develop or sell assets are studied at a special “employees” of this registration document. committee meeting with the Investment Director or the Development The human resources director, who reports directly to the Executive Director. For transactions of less than €8 million, the decision is made board, is a member of the Corporate Management Team, the CSR by the Executive Board. Transactions in excess of €8 million are committee and the sustainable development committee of the authorized by the Supervisory Board after they have been reviewed supervisory board and ensures steering of these matters at the highest by the Investment Committee composed of certain members of the levels in the organisation. Supervisory Board. To identify risks during the due diligence process, it calls on the 1.9.4.4 Financing and treasury services of a large number of specialized and highly reputed advisers (lawyers, civil-law notaries, technical experts, real estate or financial Klépierre identifies and assesses on a regular basis its exposure advisers, etc.). The Legal Department reviews compliance of the to the various sources of risk (interest rate, liquidity, currency and transaction with laws and regulations. counterparty). The interest-rate hedging strategy is outlined in For development operations, to adequately control the costs, a section 2.7.2 of this registration document, including the quantitative technical team dedicated to supporting the project leader jointly results of interest-rate sensitivity tests. determines the budget with the assistance of highly skilled principal Financial risk management and in particular the Group’s financial contractors. The project’s progress and use of the budgeted funds position, financing requirements and interest-rate risk hedging are are tracked on a weekly basis by the operational team, which reports handled by the Financing and Treasury Department. From a financing regularly to the Development Department and on a quarterly basis to standpoint, a specialized tool has been rolled out across Europe to the Corporate Management Team. record and value financing and derivative products. The Financing All Klépierre’s assets are valued by external firms twice a year. The asset and Treasury Department also has a system monitoring the capital managers in each area are tasked with providing checked data to markets in real time. the real estate experts. The appraisal figures duly verified by expert The Financing and Treasury Department reports to the Deputy CEO assessments are then controlled and analyzed by the Investment in charge of Finance (Executive Board member), bearing in mind Department. that all major financing and hedging transactions are validated in advance by the Supervisory Board. The Supervisory Board validates 1.9.4.2 Leasing the projected financing plan, which lays down the major guidelines in terms of determining the size and type of borrowings and hedging The performance and returns on Klépierre’s portfolio as a whole are interest-rate risk. monitored regularly. The Group has performance indicators covering During the year, the principal decisions in terms of financial its portfolio, revenues, footfall, etc., which are produced automatically. transactions are submitted individually for approval to the Supervisory In the event of an abrupt or severe deterioration, meetings are held Board, and a report on these transactions is given to it once they have and an action plan is then defined. been completed. Trends in the covenant situation (financial ratios) The Investment Committee convenes monthly to approve the leasing are monitored on a semi-annual basis and in particular when new of development projects. As for the leasing of the standing portfolio, transactions are arranged. a leasing budget is submitted for approval to the Executive Board Treasury is managed by the Financing and Treasury Department, every year; this budget includes five-year revenue projections and is which coordinates the reporting and monitoring of the subsidiaries’ updated twice during the year. cash projections, supporting a cash pooling system for the Group. Reporting takes place on a monthly basis. 1.9.4.3 Human resources The Financing and Treasury Department also drafts internal The Group’s human resources strategy has been developed to support procedures stating the roles of the Group’s various participants in Klépierre activity and aims to optimise its appeal as an employer as relation to cash management and the implementation of Klépierre’s well as its ability to retain talented employees, ensure a continuous share buyback programs. In addition, it validates the choice of banks match with employees’ skills and maintain a high quality of life at work. and financial terms every time the Group requests the opening of, The strategy focuses primarily on: changes to or closing of bank accounts for the whole Group. > The search for excellence in recruitment with enhanced presence for leading business and engineering schools and a dynamic 1.9.4.5 Legal and regulatory matters approach to managing interns The Group Legal Department, which reports to the Executive Board and has functional responsibility for the legal departments in each country, ensures that legal risks arising from the business lines 34 KLÉPIERRE 2017 REGISTRATION DOCUMENT