Lenovo 2013 Annual Report Download - page 56

CORPORATE GOVERNANCE REPORT
Lenovo Group Limited 2012/13 Annual Report
54
To achieve this, for many years the Company has had in place an integrated framework of internal controls which is
consistent with the COSO (the Committee of Sponsoring Organizations of the Treadway Commission) framework.
Entity
Control Environment
Risk Assessment
Control Activities
Information & Communication
Monitoring Activities
Operations
Division
Function
Operating Unit
Reporting
Compliance
Control Environment
The internal organizational environment driven by the
management operating philosophy, risk appetite, integrity,
and ethical values.
Risk Assessment
Risks are identified and the likely impact on the
organization is assessed.
Control Activities
Policies and procedures are implemented to ensure
organizational objectives and risk-mitigation activities
are effectively executed.
Information and Communication
Relevant information is communicated in an acceptable
format and timely fashion to enable the organization to
meet its objectives.
Monitoring
The internal control process is continually monitored.
Modifications are made to improve internal control
activities as a result of the monitoring process.
Management of Internal Controls
Essential to Lenovo’s internal control framework as well as the management of internal controls are well defined policies
and procedures that are properly documented and communicated to employees. Corporate policies are the foundation of
major guidelines and procedures and set out required control standards which guide employees’ everyday work at Lenovo.
The policies address legal, regulatory, and operational topics, including, for example, intellectual property, data privacy,
employee health and safety, delegation of authority, information security, and business continuity.
Additionally, the Company’s Code of Conduct, which applies to all employees, forms the basis of Lenovo’s commitment
to conducting all business with uncompromising integrity and ethical behavior. The Code also helps employees determine
when to ask for advice, and where to obtain it. All Lenovo employees are required to comply with the company’s Code
of Conduct, which is available in seven languages and is accessible on the Company’s website as well as on Lenovo’s
intranet, and to participate in regular training to reinforce the Company’s commitment to compliance and to conducting
business with integrity. Lenovo regards any violation of the Code as a serious matter and is committed to following up
and investigating on all reported concerns. Furthermore, in keeping with best practices, Lenovo has developed and
implemented an Anti-Bribery and Anti-Corruption Policy which reinforces the message in the Code of Conduct and
provides additional specific guidance regarding compliance with rules and laws related to bribery and corruption.
The internal control system of the Company covers every activity and transaction. Within this framework, management
performs periodic, enterprise-wide risk assessments and continuously monitors and reports the progress of action plans to
address the key risks. Management also tracks and reports on the implementation of strategic initiatives, business plans,
budgets and financial results. As part of the focus on financial integrity, all relevant senior executives regularly verify the
accuracy and completeness of the quarterly financial statements and compliance with key internal controls. Additionally,
the senior executives have an obligation to maintain the effectiveness of the disclosure controls, certify execution of the
quarterly disclosure process, take appropriate actions to resolve disclosure items, and report to the Audit Committee as
well as the Company’s external auditor.