13.1 Heads of the internal control functions

Heads of internal control functions should be established at an adequate hierarchical level that provides the head of the control function with the appropriate authority and stature needed to fulfil his or her responsibilities. The head of compliance and, where established, the heads of the risk management and internal audit functions should report and be directly accountable to the management body, and their performance should be reviewed by the management body.

Where necessary, the heads of internal control functions should be able to have access and report directly to the management body in its supervisory function to raise concerns and warn the supervisory function, where appropriate, when specific developments affect or may affect the issuer of ARTs. This should not prevent the heads of internal control functions from reporting within the regular reporting lines as well.

Issuers of ARTs should have documented processes in place to assign the position of the head of an internal control function and for withdrawing his or her responsibilities. In any case, the heads of internal control functions should not be removed without the prior approval of the management body in its supervisory function where it is established.