Full Annual Report - Inchcape

Governance
Corporate governance report continued
Internal control framework
Board level
Group
management
level
Corporate
governance
Performance
management process
• Strategy process
• Business planning
• Management
reporting
• Performance reviews
• Individual discussions
• Investment process
Control
environment
Information and
communications
Operations level
and Corporate
functions
Business and
support processes
Follow-up
(e.g.business control,
internal and external audit)
Values and code of conduct
Internal controls
The Board is responsible for the establishment and review of the
Company’s internal operational and compliance control systems.
The internal control systems are designed to ensure:
• effective and efficient operations;
• quality of internal and external reporting; and
• internal control and compliance with appropriate laws
and regulations.
The implementation of internal control systems is the responsibility
of the Executive Committee.
In compliance with provision C.2.1 of the Code and the Turnbull
guidance the Board annually reviews the effectiveness of the
Company’s internal control systems and reports to shareholders.
The Board has ensured that a process for managing significant
risk has been in place during the year.The process is designed to
manage rather than eliminate risk in general, not just risk of not
meeting objectives. In establishing and reviewing the system of
internal control the Directors have regard to the nature and extent
of relevant risks; the likelihood of loss being incurred and the costs
of control.
The system can only provide a reasonable but not absolute
assurance against any material mis-statement or loss and cannot
eliminate business risk.
The Board has delegated the responsibility of monitoring the
effectiveness of the Company’s internal control systems to the
Audit Committee.The Committee reports its findings to the Board
as a whole so that a view can be taken.
Risk identification,assessment and management
To assist the Board and the Audit Committee in managing internal
controls the Group operates a Risk Management Strategy Group
(RMSG) which is chaired by the Group Chief Executive. Membership
throughout the year comprised the Group Finance Director, the
General Counsel and Group Company Secretary, the Group
Corporate Affairs Director and the Director of Audit and Risk.
The RMSG meets six times per year,aligned with the Audit Committee
schedule to review risk management and control processes. Its
review covers matters such as responses to significant risks that
have been identified, output from monitoring processes (including
internal audit reports) and changes to be made to the internal
control systems. It also follows up on areas that require improvement
and reports back to the Audit Committee.
Risk management programme
The Company has relaunched its risk management programme
known as Inchcape Peace of Mind (iPOM).This is a programme
bringing together the various risk management projects and
initiatives under one systematic and collective approach.
iPOM aims to maximise opportunities to improve performance
and meet strategic goals with an integrated, simple approach
to risk management.Through iPOM we will constantly seek to instill
the right behaviours across the organisation and to ensure that
compliance continues to be embedded within the Group’s way
of operating.
60
Inchcape plc ¦ Annual Report and Accounts 2009