GE 2010 Annual Report Download - page 32

30 GE 2010 ANNUAL REPORT
Management’s Discussion of Financial Responsibility
We believe that great companies are built on a foundation of
reliable financial information and compliance with the spirit and
letter of the law. For General Electric Company, that foundation
includes rigorous management oversight of, and an unyielding
dedication to, controllership. The financial disclosures in this
report are one product of our commitment to high-quality
financial reporting. In addition, we make every effort to adopt
appropriate accounting policies, we devote our full resources
to ensuring that those policies are applied properly and consis-
tently and we do our best to fairly present our financial results
in a manner that is complete and understandable.
Members of our corporate leadership team review each of
our businesses routinely on matters that range from overall strat-
egy and financial performance to staffing and compliance. Our
business leaders monitor financial and operating systems,
enabling us to identify potential opportunities and concerns at
an early stage and positioning us to respond rapidly. Our Board
of Directors oversees management’s business conduct, and our
Audit Committee, which consists entirely of independent directors,
oversees our internal control over financial reporting. We continu-
ally examine our governance practices in an effort to enhance
investor trust and improve the Board’s overall effectiveness. The
Board and its committees annually conduct a performance self-
evaluation and recommend improvements. Our Presiding Director
led three meetings of non-management directors this year, help-
ing us sharpen our full Board meetings to better cover significant
topics. Compensation policies for our executives are aligned with
the long-term interests of GE investors.
We strive to maintain a dynamic system of internal controls
and procedures—including internal control over financial
reporting—designed to ensure reliable financial recordkeeping,
transparent financial reporting and disclosure, and protection of
physical and intellectual property. We recruit, develop and retain
a world-class financial team. Our internal audit function, including
members of our Corporate Audit Staff, conducts thousands of
financial, compliance and process improvement audits each year.
Our Audit Committee oversees the scope and evaluates the
overall results of these audits, and members of that Committee
regularly attend GE Capital Services Board of Directors, Corporate
Audit Staff and Controllership Council meetings. Our global integ-
rity policies—“The Spirit & The Letter”—require compliance with
law and policy, and pertain to such vital issues as upholding finan-
cial integrity and avoiding conflicts of interest. These integrity
policies are available in 31 languages, and are provided to all
of our employees, holding each of them accountable for compli-
ance. Our strong compliance culture reinforces these efforts by
requiring employees to raise any compliance concerns and by
prohibiting retribution for doing so. To facilitate open and candid
communication, we have designated ombudspersons through-
out the Company to act as independent resources for reporting
integrity or compliance concerns. We hold our directors, con-
sultants, agents and independent contractors to the same
integrity standards.
We are keenly aware of the importance of full and open
presentation of our financial position and operating results, and
rely for this purpose on our disclosure controls and procedures,
including our Disclosure Committee, which comprises senior
executives with detailed knowledge of our businesses and the
related needs of our investors. We ask this committee to review
our compliance with accounting and disclosure requirements,
to evaluate the fairness of our financial and non-financial dis-
closures, and to report their findings to us. We further ensure
strong disclosure by holding more than 300 analyst and investor
meetings annually.
We welcome the strong oversight of our financial reporting
activities by our independent registered public accounting
firm, KPMG LLP, engaged by and reporting directly to the Audit
Committee. U.S. legislation requires management to report on
internal control over financial reporting and for auditors to
render an opinion on such controls. Our report follows and the
KPMG LLP report for 2010 appears on the following page.
Management’s Annual Report on Internal Control
Over Financial Reporting
Management is responsible for establishing and maintaining
adequate internal control over financial reporting for the
Company. With our participation, an evaluation of the effective-
ness of our internal control over financial reporting was
conducted as of December 31, 2010, based on the framework
and criteria established in Internal Control—Integrated Framework,
issued by the Committee of Sponsoring Organizations of the
Treadway Commission.
Based on this evaluation, our management has concluded
that our internal control over financial reporting was effective as
of December 31, 2010.
Our independent registered public accounting firm has issued
an audit report on our internal control over financial reporting.
Their report follows.
JEFFREY R. IMMELT KEITH S. SHERIN
Chairman of the Board and Vice Chairman and
Chief Executive Officer Chief Financial Officer
February 25, 2011