Lenovo 2012 Annual Report Download - page 48

2011/12 Annual Report Lenovo Group Limited
46
CORPORATE GOVERNANCE REPORT
During the year, the Chairman held two executive sessions
with non-executive directors (including independent non-
executive directors), the first one being a session attended
by only human resources management to review the
organization human resources planning of the Company
while the other was without the presence of all the senior
management to discuss future Board meeting matters.
Management Functions
The Company has a formal schedule of matters specifically
reserved to the Board and those delegated to management.
The management is responsible for the daily operations and
administration function of the Group under the leadership
of the CEO. The Board has given clear directions to
management as to the matters that must be approved
by the Board before decisions are made on behalf of the
Company. The types of decisions to be delegated by
the Board to management include implementation of the
strategy and direction determined by the Board, operation
of the Group’s businesses, preparation of financial
statements and operating budgets, and compliance with
applicable laws and regulations. These arrangements
will be reviewed periodically to ensure that they remain
appropriate to our needs. The list of senior management
and their biography are set out on pages 90 to 91 of this
annual report.
ACCOUNTABILITY AND AUDIT
Financial Reporting
The Board is responsible for presenting a balanced,
clear and comprehensive assessment of the Company’s
performance, position and prospects. The Board is also
responsible for the preparation of financial statements for
each financial year which gives a true and fair view of the
state of affairs of the Group on a going concern basis while
the external auditor’s responsibilities to shareholders are set
out in the Independent Auditor’s Report on page 103 of this
annual report.
Internal Control
The Board acknowledges its responsibility to ensure the
Company maintains sound and effective internal controls.
This is achieved through a defined management structure
with specified limits of authority and defined control
responsibility to:
• Achievebusinessobjectivesandsafeguardassets
against unauthorized use or disposition;
• Ensuremaintenanceofproperaccountingrecordsfor
the provision of reliable financial information for internal
use or for publication; and
• Ensurecompliancewiththerelevantlegislationand
regulations.
To achieve this, the Company has established an integrated
framework of internal controls which is consistent with the
COSO (the Committee of Sponsoring Organizations of the
Treadway Commission) framework.
While management is responsible for the design,
implementation and maintenance of internal controls, the
Board and its Audit Committee acknowledge responsibility
to ensure Lenovo maintains sound and effective internal
controls.
Management of Internal Controls
Essential to the internal control system are well defined
policies and procedures that are properly documented and
communicated to employees. The Corporate policies form
the basis of all company guidelines and procedures and set
out the control standards required which guide employees’
everyday work within Lenovo business entities. The policies
cover those required for administrative and operating
activities such as performance monitoring, employee health
and safety, delegation of authority, personnel administration,
information security, and business continuity management.