GE 2014 Annual Report Download - page 144

124 GE 2014 FORM 10-K
REPORTS
MANAGEMENT AND AUDITOR’S REPORTS
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 consistently 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 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 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 lead director chaired three meetings of our independent
directors this year, helping 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 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 financial 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 compliance. 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 throughout the Company to act as independent
resources for reporting integrity or compliance concerns. We hold our directors, consultants, 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
disclosures, and to report their findings to us. In 2014, we further ensured strong disclosure by holding approximately 70
analyst and investor meetings with GE leadership present.
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 and the KPMG LLP
report for 2014 follow.