Full Annual Report - Inchcape

Section Two
Two
Governance
iPOM – 7 Key steps
Step
1 Written
compliance
standards and
procedures
2 Oversight
responsibilities
assigned to
appropriate
personnel
3 Appropriate
delegation
of authority
4 Training and
education
5 Routine
monitoring,
reporting
and auditing
6 Enforcement
and discipline
7 Response
and prevention
Purpose
What are the rules
Who is in charge
What employee education is in place
regarding the rules and standards
How do we know the rules are
being followed
What happens if the rules and
standards are not being followed
Examples of key projects for 2009, including key initiatives that were
either introduced or reinforced were:
• compliance certificates signed by all Managing Directors and
Finance Directors as part of the year end process confirming
that all key controls had been complied with and there were no
outstanding issues to be resolved.
• the Group Risk Register process continued, with a bottom up top
down approach used to identify the key Group and market risks
and to look at the impact of mitigating actions that had been
implemented.The Business Risk Assessment forms part of the
scheduled Annual Operating Plan process and monthly market
review meetings as well as being a key agenda item for review
at the RMSG and Audit Committee meetings;
• a Group Subsidiary Governance Manual was rolled out to all
markets in 2009.This sets out the policies that all operations
within the Group are required to comply with, covering a number
of areas including tax, treasury, finance, legal, company
secretariat and HR.
The RMSG is supported by market risk committees that share
the common risk agenda, and which report to the RMSG on
a regular basis.
Control procedures and monitoring systems
A Group Risk Register,which identifies the key risks,the impact should
they occur and actions being taken to manage these risks at the
desired level, is produced for each business unit. In addition, actions
to be taken in the event that such risks crystallise and proposed
improvements to the way they are managed are also included.
The Group Risk Register is approved by the RMSG and the Executive
Committee and discussed by the Audit Committee at its meetings.
The Group also monitors its control procedures in the following
key areas:
Financial reporting
There is a comprehensive system with an annual budget approved
by Directors. Monthly actual results are reviewed and reported
against budget and, where appropriate, revised forecasts are
presented at Board meetings.
Investment appraisal
The Group has clearly defined policies for capital expenditure.
These include annual budgets and detailed appraisal and
review procedures.
Internal Audit
The adequacy and effectiveness of the Group’s internal control
systems are monitored by the Internal Audit team who report to the
Audit Committee on a regular basis. Internal Audit also works closely
with management and the external auditors.
Business Unit Controls
Each business in the Group is required to identify its key risks and the
control procedures in place to mitigate those risks.This evaluation
takes place twice a year as part of the preparation and update of
the business plans.
During 2009, the Managing Director and Finance Director of each
business unit in the Group signed a compliance certificate to
confirm:
• the accuracy and completeness of the accounts submitted
for consolidation;
• compliance with local laws and regulations;
• the absence of fraud;
• the absence of conflicted directorships; and
• compliance with Inchcape policies.
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