5:16 Conflicting interests at group level should be identified and prevented or managed.  These may include:

1. conflicts of interest arising from the performance of mutually conflicting activities;
2. intra-group transactions and the allocation of capital within the group;

• diverging interests between the institution responsible for the group and subsidiaries or between subsidiaries, e.g. regarding the allocation of corporate and regulatory opportunities;

1. decisions of the group which, for the various activities carried out by different subsidiaries, impact differently the management of their financial situation.

5:17 In the exercise of their corporate responsibility, the directors of the subsidiary should dispose of appropriate resources to safeguard the firm’s corporate interest while keeping in mind its stakeholders. For this purpose, intra-group mechanisms should be put in place to identify certain decisions or practices at group level that could give rise to an intra-group conflict of interest and bring them to the attention of the governing bodies of the subsidiary and the institution responsible for the group.  In the case of intra-group operations or transactions that could be material for the subsidiary, an ad hoc committee of independent directors should be set up to issue an opinion, for consideration by the subsidiary’s statutory governing body, on the subsidiary’s interest in the context of such intra-group operations or transactions.

5:18 Depending on the group’s governance model, these internal mechanisms should also be based, for example, on a robust supervisory function within the subsidiary’s statutory governing body, directors on the subsidiary’s statutory governing body who are independent from the institution responsible for the group or subgroup, or effective independent control functions within the subsidiary.