As an important element of the risk management system, an internal audit function is in place that reports directly to the President of the Management Board, in accordance with the Articles of Association of the Bank. Its task is to investigate and evaluate, independently and objectively, the adequacy and effectiveness of the risk management and internal control system. In compliance with external requirements and best practices, all the operations of BGK are subject to audit. The internal audit function at BGK follows the IIA’s International Standards for the Professional Practice of Internal Auditing, which is confirmed by regular independent external reviews. In line with regulatory requirements, the Bank has mechanisms in place which guarantee independence of the internal audit function, including but not limited to supervision of the internal audit function by the Supervisory Board, approval of the appointment of the internal audit head by the Supervisory Board, approval of the function’s plans and reports by the Supervisory Board as well as direct communication between the internal audit head and the Chairman of the Audit Committee.
In accordance with the Risk Management Strategy at BGK, the risks identified in the Bank’s operations are subject to risk management procedures. The Strategy also defined the general acceptable level of risk, whereas detailed risk levels in relation to specific material risks have been specified in risk management policies applicable to those risks. Moreover, to facilitate and increase the efficiency of risk management, each organisational unit of the Bank is required to include in its organisational rules information on the types of risks that affect its operations.
The Management Board of the Bank regularly monitors whether the risk management system matches the risk size and profile and the legal environment.
Through its actions and conduct, the Management Board of the Bank promotes the awareness of the relevance of risk in the activities pursued by BGK, the principles of assuming risk and its management, i.e. the so-called risk culture. Regular initiatives aimed at building the risk culture at BGK include the Risk Culture Week and the Risk Coordinator Academy.
Since 2020, the Bank has been implementing the provisions of CRDV/CRRII. To that end, a separate project has been set up.