Bouwinvest recognises the importance of a solid process and framework for risk management aimed at identifying and mitigating risks, which in turn makes it possible for the company to achieve its goals more effectively. Bouwinvest has chosen the globally recognised COSO framework as the basis for its risk management. This model goes beyond internal controls and covers the entire internal management system and is known as COSO II or the Enterprise Risk Management Framework (ERMF). Bouwinvest used this framework to draw up its own reporting and monitoring framework with its four lines of defence model (see figure below). Compliance, risk management, control and internal audit have all been designed in line with this model. This model takes an integrated approach to compliance and risk management, with policies designed to meet the requirements of regulatory bodies, public opinion and shareholders, while the execution of supervisory functions are made as focused, efficient and cost effective as possible.
The four lines of defence are:
Board of Directors – responsible for embedding the risk and control environment in the organisation’s day-to-day operations.
The compliance, risk management and control functions – responsible for risk-related, compliance and control policies, efficient and cost-effective implementation of the policies and continuous improvements.
Independent internal auditor – responsible for the execution of required control measures.
Supervisory Board and external auditor – the Supervisory Board supervises and advises the Board of Directors.
Bouwinvest's four lines of defence
Alternative Investment Fund Managers Directive (AIFMD)
In early 2014, Bouwinvest was one of the first parties in the Netherlands to obtain an AFM licence as required by the AIFMD. This licence allows Bouwinvest to manage funds that are open for other institutional investors besides bpfBOUW. The AIFMD specifies certain transparency and integrity-related requirements for Alternative Investment Funds. In 2015, Bouwinvest further optimised its reporting processes. In addition to this, Bouwinvest streamlined its cooperation with depositary Intertrust. In 2016, Bouwinvest conducted an assessment of the processes in place and made any necessary improvements, but discovered no major issues. Bouwinvest foresees no AIFMD-related challenges for 2017.
Dutch Financial Supervision Act
Bouwinvest has obtained a licence within the meaning of Article 2:65 of the Dutch Financial Supervision Act (Wet op het financieel toezicht). Bouwinvest is therefore subject to supervision of the Dutch Financial Markets Authority (AFM) and the Dutch Central Bank (DNB).