Annual Report 2012 - Tivoli

❖tivoli ANNUAL REPORT 2012 ❖❖STATEMENT OFCORPORATE GOVERNANCETivoli’s Management emphasises corporate governanceand corporate governance is continuouslydiscussed by Tivoli’s Board of Directors.In 2011 the Committee on Corporate Governance issuedupdated Recommendations for corporate governance.As previously, the recommendations are basedon a “comply or explain” principle, which makes itlegitimate for a company either to comply with therecommendations or explain why it does not comply.Tivoli complies with all of the 79 recommendations,except for recommendation 5.10.2.Recommendation 5.10.2 points out that a majority ofthe members of a board committee should be independentmembers. On Tivoli’s Board of Directors, severalcommittees consist of the full Board of Directors.At the same time, the full Board of Directors, includingmembers elected by the employees, consists of sixmembers, two of four members elected by the generalmeeting being dependent and the members elected bythe employees also being considered dependent as theyare employed by Tivoli. Thus, Tivoli does not complywith recommendation 5.10.2.A detailed description of Tivoli’s position on allcorporate governance recommendations is availableon http://www.tivoli.dk/~/media/Files/Pdf/Aarsrapporter/corpgov2012uk.pdfCONTROL ENVIRONMENTThe Board of Directors and the Executive Board determineand approve general policies, procedures andcontrols in key areas relating to the financial reportingprocess. This is based on a clear organisationalstructure, clear reporting lines, authorisation andapproval procedures as well as segregation of duties.Written guidelines have been prepared for bookkeeping,budgeting and month-end procedures, includingreconciliations and preparation of the regular financialreporting.Moreover, policies for approval of invoices and otherexpenditure vouchers have been established so as toensure due approval.RISK ASSESSMENTThe Board of Directors and the Executive Boardperform an annual overall risk assessment of thefinancial reporting process with a view to identifyingthe most significant and risky areas.The determination of certain items in the financialstatements requires estimate and judgment on thepart of Management. These items are given specialattention in connection with the risk assessment andare described in note 2 to the Annual Report.INTERNAL CONTROLS AND RISKMANAGEMENT RELATING TO FINANCIALREPORTINGThe Board of Directors and the Executive Board haveoverall responsibility for the Company’s risk managementand internal controls relating to the financialreporting process.38