Lenovo 2014 Annual Report Download - page 60

58 Lenovo Group Limited 2013/14 Annual Report
CORPORATE GOVERNANCE REPORT
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.
Along with establishing guidelines, principles and values, Lenovo recognizes that an environment where employees
feel free to bring concerns to management is also required to make our internal control system successful. Lenovo’s
corporate policy on reporting unlawful or inappropriate conduct makes it clear that all reports will be kept anonymous
and confidential. Most importantly, Lenovo maintains if employees seek advice, raise a concern relating to a potential
compliance issue, or report suspected misconduct, any form of retaliation or harassment will not be tolerated.
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.
To enhance the monitoring of controls, Lenovo recognizes the importance of self testing of key controls by
management in order to ensure that the internal controls are working as intended or that necessary actions have been
taken to address control weaknesses. To further assist management with monitoring controls, Lenovo has established
a Worldwide Business Control Organization. As part of its mission, the Worldwide Business Control Organization helps
to clearly communicate control requirements across all organizations and process owners, evaluate the operating
effectiveness and efficiency of the established processes and controls in order to help to mitigate risk.