GE 2012 Annual Report Download - page 34

32 GE 2012 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 strategy
and financial performance to staffing and compliance. Our busi-
ness 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 over-
sees management’s business conduct, and our Audit Committee,
which consists entirely of independent directors, oversees our
internal control over financial reporting. We continually 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 four
meetings of non-management directors this year, helping us
sharpen our full Board meetings to better cover significant top-
ics. 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, includ-
ing 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 Board of Directors, Corporate Audit
Staff and Controllership Council meetings. Our global integrity
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 approximately 400 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 2012 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, 2012, 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, 2012.
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 26, 2013