Lenovo 2015 Annual Report Download - page 75
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73
2014/15 Annual Report Lenovo Group Limited
Control effectiveness
The Board, through the Audit Committee of the Company, conducts a continuous review of the effectiveness of the
internal control system operating in the Company and considers it to be adequate and effective. The review covers
all material controls, including financial, operational and compliance controls, and risk management functions. The
Board is not aware of any significant areas of concern which may affect the shareholders. The Board is satisfied that
the Company has fully complied with the code provisions on internal controls as set forth in the CG Code.
Enterprise Risk Management
At Lenovo, risk is defined as a potential action, event or circumstance that could impact the Company’s ability,
favorably or unfavorably, to meet its strategic goals. Risk is an inherent part of the Company and needs to be
understood and managed properly to provide a foundation for the Company’s sustained growth. In line with the
commitment to deliver sustainable value, Lenovo has implemented an Enterprise Risk Management (ERM) framework
to proactively manage risks.
Lenovo’s ERM framework is effected by the Board and management team, and is applied in strategy setting and
across all major functions of the Company. It involves:–
• The ERM team, who is responsible to design, implement, review, and update Lenovo ERM framework.
• All Lenovo major functions, where risk ownership is established via the appointment of ERM Champions in each
function.
Risk Champions ERM Team Audit Committee Board of Directors
Identify risks
Assess
Manage
Monitor
Review
Risk registration
Report risks to
Audit Committee
Risk projects
Engage actuarial work
Recommend risk tolerance
Review risks
Raise concerns
Approve risk tolerance
Within this framework, critical and major risks of the business functions, especially in view of the changing business
environment, are identified and assessed to determine the appropriate risk mitigation plans to be implemented.
These are monitored and reviewed by each business function as well as at the group level. And at least annually,
these influential risks are highlighted to the Audit Committee, along with the status of actions taken to manage these
risks. Actuarial studies are also engaged periodically to quantify the risks, and the group risk tolerance adjusted
accordingly.