Peachtree 2012 Annual Report Download - page 60

1 Executive Committee
The Executive Committee is responsible for the identication, reporting
and ongoing management of risks and for the stewardship of the risk
management approach.
The Executive Committee identies and assesses the key strategic risks to
the Group on at least an annual basis. The output of the assessment is sent to
the Group Board for review and to the country CEOs for inclusion in their risk
assessment exercises.
2 Country CEOs and Functional Heads
Country CEOs and functional heads are responsible for the identication,
reporting and ongoing management of risks in their respective countries
and functions.
The country CEOs and functional heads facilitate their risk assessment
exercise to review the key strategic risks and to identify the top local risks
within their country of function. The output of the assessment is sent to
regional management and the Group Risk and Assurance Director for review
and challenge.
3 Regional management and Group management
Regional management and Group management are responsible for the
reporting, challenge and ongoing management of risks in their respective
regions and functions.
Regional management, with support from the Group Risk and Assurance
Director, review and challenge the risk information from the countries and
agree the top regional risks and the regional response to the key strategic risks.
Group management, facilitated by the Group Risk and Assurance Director,
identify top risks from central functions (for example, tax and treasury) for
inclusion in the functional level risk report.
4 Group Risk and Assurance Director
The Group Risk and Assurance Director is responsible for the facilitation and
implementation of the risk management approach throughout the Group.
The Group Risk and Assurance Director consolidates the regional risk reports
and creates the Group Risk Report containing top local risks and the
responses to the key strategic risks for the Group as a whole. The Group
Risk Report is sent to the Executive Committee for review and challenge.
5 Audit Committee
The Audit Committee is responsible for the independent review and challenge
of the adequacy and effectiveness of the risk management approach.
The Audit Committee review and challenge the Group Risk Report. The
Group Risk Report is then submitted to the Group Board for review.
6 Group Board
The Group Board has overall responsibility for risk management and
implementation of the risk management policy.
The Group Board reviews the output from the Executive Committee.
During the year the risk management processes and procedures set to ensure
that risks are identied from a top down strategic perspective as well as a
bottom up local perspective, have operated as described above. Facilitated
risk workshops have been completed with the Executive Committee and major
territories around the Group. Results from risk management activities have
been reported to and discussed directly with the Executive Committee
duringthe year.
Corporate governance report continued
Whistleblowing
A “whistleblowing” telephone hotline service operates in many operating
companies in the Group (including all those in the UK and US) allowing
employees to raise issues of concern in relation to dishonesty or malpractice
on an entirely condential basis. Processes for the condential reporting of
concerns exist in France, Germany and Spain and the Group continues to seek
the introduction of further telephone hotlines where local legislation permits.
The Audit Committee receives regular reports on any matters raised through
these services and monitors their use throughout the Group. As a result of
these structures, the Board considers that it receives adequate information
for the identication and assessment of risk.
Financial reporting
In addition to the general internal controls and risk management processes
described above, the Group also has specic internal controls and risk
management systems to govern the nancial reporting process. The
requirements for producing nancial information are governed by the Group
Accounting Manual, against which the Group’s external auditors review the
nancial statements. Financial control requirements are set out in a detailed
Financial Controls Policy, which is subject to internal audit reviews on an
annual basis. Any part of the Group not subject to a specic internal audit
review of nancial controls in any given year is required to self-assess
the effectiveness of their nancial control environment. Management
representations covering the compliance with relevant policies and the
accuracy of nancial information are also collated on an annual basis.
Quality and integrity of personnel
The integrity and competence of personnel is ensured through high recruitment
standards and the provision of subsequent training and development.
High-quality personnel are seen as an essential part of the control environment.
Management structure
The Board has overall responsibility for the Group. Each executive director has
been given responsibility for specic aspects of the Group’s affairs. A clearly
dened organisational structure exists within which individual responsibilities
are identied and can be monitored. The management of the Group as a
whole is delegated to the Chief Executive, the executive directors and the
ExecutiveCommittee.
The Executive Committee meets regularly to agree strategy, monitor
performance and consider key business issues. As part of its review, it
considers the risks associated with the delivery of strategy and important
governance issues within the operating companies. Within the Group team,
based in Newcastle upon Tyne, there are a number of central administrative
functions such as Group Treasury, Corporate Communications, Group Legal
and Business Development. These functions report to the Board through its
executive members and the members of the Executive Committee. A number
of Group-wide policies issued by the central Group team and administered
both centrally and at local level, ensure compliance with key governance
standards. These policies cover areas such as nance, data protection and
mergers and acquisitions.
The conduct of Sage’s individual businesses is delegated to the local
executive management teams. Details of the authority delegated to local
and regional management is set out in a delegation of authority matrix which
is communicated to management throughout the business. These teams
are accountable for the conduct and performance of their businesses within
the agreed business strategy. They have full authority to act subject to the
reserved powers and sanctioning limits laid down by the Board and to Group
policies and guidelines.
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