Connect - Schneider Electric

3 CORPORATE GOVERNANCE
INTERNAL CONTROL AND RISK MANAGEMENT
10.3 Distributing information: benchmarks and guidelines
The main internal control benchmarks are available to all employees,
notably on the Group intranet. The Global Functions send updates
of these Registration Documents to the appropriate units and
individuals through their networks of correspondents.
In some cases, dedicated e-mails are sent out or messages are
posted on the intranet portal to inform users about publications
or updates.
Whenever possible, the distribution network leverages the
managerial/functional organisation to distribute standards
and guidelines.
Principles of Responsibility
The Principles of Responsibility, initially published in 2002, were
updated in 2009.
Translated into all the languages used within the Group, given
to all new employees and available on the Group’s intranet, they
are designed to guide employees in their decisions and actions.
They defi ne the Group’s essential values and set out individual
responsibility in respect of these values. They also set out the
interrogation and alert procedures.
A Committee on Ethics and Responsibility has been set up, and
correspondents appointed to steer action in this area, to make
updates and to validate changes. The Committee also answers
employee questions that are not addressed in the companion
guide to the Principles of Responsibility, or that employees’ own
managers are unable to answer. (see “Sustainable development
framework”, Chapter 2 Section 2). In 2011, Internal Audit carried out
an assignment aimed at assessing the deployment of the Principals
of Responsibility as well as the adequacy of the information and
training resources with managers and employees.
Insider code
This code sets out the rules to be followed by management and
employees to prevent insider trading. It imposes an obligation of
confi dentiality on all employees who have access to confi dential
information and sets permanent restrictions on purchases and
sales of Schneider Electric SA shares by persons who have
access to price-sensitive information in the course of their work
(see “Organisational and operating procedures of the Supervisory
Board”, Chapter 3 § 2).
International internal auditing standards
The Schneider Electric internal auditors are committed to complying
with the international standards published by the Institute of Internal
Auditors (IIA) and other bodies.
International Financial Reporting Standards
(IFRS)
The consolidated fi nancial statements for all fi scal years
commencing on and after January 1, 2005 have been prepared in
accordance with International Financial Reporting Standards (IFRS),
in compliance with European Union regulation 1606/2002.
136 2011 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC
The Group applies IFRS as adopted by the European Union as of
December 31, 2011.
The Group’s accounting principles refl ect the underlying
assumptions and qualitative characteristics identifi ed in the IFRS
accounting framework. accrual accounting, business continuity,
true and fair view, rule of substance over form, neutrality, prudence,
completeness, comparability, relevance and intelligibility.
The application of Group accounting principles and methods is
mandatory for all Group entities, for management reporting and
statutory consolidation.
IFRS guidelines are available on the intranet, along with training
modules covering the more technical aspects.
Commitment limits and authorisations
Commitment limits have been set for executives from Group level
down to the individual units.
Thus, product purchase and sale contracts may only be signed
by, or with the authorisation of, operations correspondents who
benefi t from ad-hoc authorisations which, in turn, are granted by
their managers. Within this organisational framework, Business
executives have the power to authorise the signature of product or
service, purchase or sale contracts covering up to EUR10 million.
Moreover, they enable their collaborators to authorise smaller
amounts which they consider appropriate for the signature of such
contracts.
Moreover, all transactions that may affect the Group’s fundamental
interests, due to their size or nature, must be authorised in advance
by the Management Board or, in some cases, by the Supervisory
Board. This rule applies in particular to all transactions affecting the
scope of consolidation, purchases and sales of strategic assets,
trademarks and patents, and off-balance sheet commitments.
Statutory and management
reporting principles
An integrated reporting and consolidation system applicable to all
Group companies and their management units has been in place
since January 1, 2006. Statutory and management reporting
principles and support tools are available on the Group intranet.
The subsidiaries record their transactions in accordance with Group
standards. Data are then adjusted, where necessary, to produce
the local statutory and tax accounts.
The reporting system includes consistency controls, a comparison
of the opening and closing balance sheets and items required to
analyse management results.
Key Internal Controls
A list of Key Internal Controls was drawn up in 2008 and is expanded
annually. Its 114 items cover:
• the control environment (Principles of Responsibility, Delegation
of Powers, Separation of Functions, Business Continuity Plans
and Retention of Records);