Connect - Schneider Electric
Connect - Schneider Electric
Connect - Schneider Electric
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3 CORPORATE GOVERNANCE<br />
INTERNAL CONTROL AND RISK MANAGEMENT<br />
10.2 Internal control organisation and management: key participants<br />
In 2011, the Group’s organisational chart rests on Senior<br />
Management, of Global Functions, of Operating Divisions;<br />
defi ned in terms of businesses, geographical location, logistical or<br />
industrial responsibility.<br />
The Group’s corporate governance bodies supervise the<br />
development of the internal control and risk management systems.<br />
The Audit Committee has particular responsibility for monitoring the<br />
system’s effectiveness (see Committees of the Supervisory Board,<br />
Chapter 3 § 4).<br />
Each manager is responsible for monitoring internal control in<br />
his or her area, at the different levels of the organisation, as are<br />
all key internal control participants, in accordance with the tasks<br />
described below.<br />
Senior Management<br />
Senior Management is responsible for designing and leading the<br />
overall internal control system, with support from all key participants<br />
and notably the Internal Audit and Group’s Internal Control<br />
Departments.<br />
It also monitors the Group’s performance, during quarterly reviews<br />
with the Operating Divisions and Global Functions. These reviews<br />
cover business trends, action plans, current results and forecasts<br />
for the quarters ahead. Similar reviews are carried out at different<br />
levels of the Group prior to Senior Management’s quarterly review.<br />
Internal Audit Department<br />
The Internal Audit Department reports to Senior Management. It<br />
had an average staff of 13 people in 2011. The internal auditors are<br />
responsible for ensuring that, at the level of each unit:<br />
• risks are appropriately identifi ed and managed;<br />
• signifi cant fi nancial, management and operating information is<br />
accurate, reliable and timely;<br />
• employees’ actions are in compliance with the Group’s policies,<br />
standards, procedures and the applicable laws and regulations;<br />
• instructions issued by Senior Management are effectively applied;<br />
• resources are acquired economically, used effi ciently and<br />
protected adequately.<br />
Annual internal audit plans are drawn up based on risk and control<br />
concerns identifi ed by Senior Management, taking into account the<br />
results of past audits, the work performed by the external auditors<br />
and the results of internal control self-assessments returned by the<br />
units. When necessary, the audit plan is adjusted during the year to<br />
include special requests from Senior Management. These missions,<br />
which are not included in the initial audit plan, help the Group detect<br />
potential cases of fraud.<br />
The internal audit process is described in Section 5 below.<br />
After each internal audit, a report is issued setting out the auditors’<br />
fi ndings and recommendations. Measures are taken to monitor<br />
134 2011 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC<br />
implementation of recommendations and specifi c audits are<br />
conducted if necessary.<br />
The audit reports and the implementation of its recommendations<br />
are distributed to Senior Management and to the Audit Committee.<br />
The external auditors also have access to the reports.<br />
Internal Control Department<br />
The Internal Control Department, which reports to the Internal Audit<br />
Department, is responsible particularly for:<br />
• defi ning and updating the list of Key Internal Controls in close<br />
cooperation with the Global Functions and in line with the<br />
recommendation of the AMF reference framework;<br />
• maintaining and leading a network:<br />
– a network of internal business controllers in the Operating<br />
Divisions, with responsibility for defi ning Key Internal Controls<br />
and ensuring their use in the operating units within their<br />
scope – notably through training sessions and annual selfassessments,<br />
– internal regional controllers to carry out training in the entities<br />
and on-site control of the accuracy of self-evaluations and the<br />
effi ciency of the remediation plans implemented as a result<br />
of the previous year’s self-evaluations, by the entities coming<br />
within their geographic scope. After each internal audit, a<br />
report is issued setting out fi ndings and recommendations for<br />
the attention of the persons in charge of the entity audited,<br />
– the internal controllers in the Operating and Regional Divisions,<br />
in their respective assignments, act in close cooperation using<br />
standardised methods;<br />
• analysing and critically reviewing the results of these<br />
self- assessments to identify areas that require an action plan at<br />
the Group, Operating Division or Global Function level;<br />
• leading the Internal Control Committee, comprising internal<br />
controllers from the Operating and Regional Divisions, as well<br />
as internal control correspondents from the Global Functions.<br />
The Committee members work to improve internal control and<br />
adapt procedures in light of the results of self-assessments and<br />
changes in the business environment or organisation.<br />
Finance and Control – Legal Affairs<br />
Department<br />
The Finance and Control – Legal Affairs Department is actively<br />
involved in organising control and ensuring compliance<br />
with procedures.<br />
Within the department, the Management Control and Accounting<br />
unit plays a key role in the internal control system by:<br />
• drafting and updating instructions designed to ensure that<br />
statutory and management accounting practices are consistent<br />
throughout the Group and compliant with applicable regulations;<br />
• organising period-end closing procedures;