Peachtree 2015 Annual Report Download - page 70

Whistleblowing
A whistleblowing telephone hotline service operates in all of our
operating companies, allowing employees to raise concerns in relation
to dishonesty or malpractice on an entirely confidential basis. The Audit
and Risk Commiee receives regular reports on any maers raised
through these services and monitors the use throughout the Group.
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
A clearly defined organisational structure exists within which individual
responsibilities are identified and can be monitored. The management
of the Group as a whole is delegated to the Chief Executive Officer and
the Executive Commiee, as discussed on page 64. Within the Group
team there are a number of central administrative functions such as
Group Treasury, Corporate Communications and Group Legal. These
functions report to the Board through its executive members and the
members of the Executive Commiee.
A number of Group-wide policies, issued and administered centrally,
have been set to ensure compliance with key governance standards.
These policies cover areas such as finance, 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 are set out in a
delegation of authority matrix which is communicated to management
throughout Sage. These teams are accountable for the conduct and
performance of their businesses within the agreed business strategy.
Budgetary process
A comprehensive budgeting system is in place, with annual budgets
for all operating companies being approved by respective local boards.
Subsequently the combined budget is subject to consideration and
approval by the Board. Management information systems provide the
directors with relevant and timely information required to monitor
financial performance.
Investment appraisal (including acquisitions)
Budgetary approval and defined authorisation levels regulate capital
expenditure. As part of the budgetary process the Board considers
proposals for research and development programmes. Acquisition
activity is subject to internal guidelines governing investment
appraisal criteria, financial targets, negotiation, execution and
post-acquisition management.
Monitoring and review
There are processes in place to monitor the system of internal controls
and to report any significant control failings or weaknesses and planned
mitigating actions. These processes include:
– On an on-going basis, the Sage operating companies certify that
Sage’s policy requirements have been received and understood
– Management representations covering compliance with relevant
policies and the accuracy of financial information are collated on
an annual basis
Internal Audit
Internal Audit activities are provided by an in-house team supplemented
under co-source agreements by third-party providers. The role of
Head of Internal Audit is undertaken by the Group Risk and Assurance
Director who has a direct reporting line to the Audit and RiskCommiee
and its Chairman in order to ensure independence.
Internal Audit’s role is to advise management and the Board on the
extent to which systems of risk management and internal controls
are effective.
More information on Internal Audit is set out within the Audit and Risk
Commiee section on page 72.
Relations with shareholders
Communication with shareholders is given high priority. A full Annual
Report & Accounts is sent to all shareholders who wish to receive one
and all information on Sage’s activities, published financial results and
the Annual Report & Accounts can be found on our website. There is
regular dialogue with individual institutional shareholders and there are
presentations to analysts aer our announcement of the year-end and
half-year results.
At each meeting, the Board receives an update on presentations to
investors and communications from shareholders to ensure that the
Board has an understanding of their views. The Annual General Meeting
is used to communicate with private and institutional investors and the
Board welcomes their participation.
In addition, during this financial year, on 24 June 2015 Sage held a
Capital Markets Day for investorsduring which we outlinedour future
strategy and operational implementation plans, as well as our ambition
for the future.A suite of key performance indicators was also provided,
on whichthe success of the businessin the future will be judged.For
more details please see the discussionon page 28.
Information included in the Directors’ report
Certain information, fulfilling certain requirements of the Corporate
Governance Statement, can be found in the Directors’ report and is
incorporated into this Corporate governance section by reference.
For reference, relevant sections of the Director’s report are:
– Substantial shareholdings
– Deadlines for voting rights
– Repurchase of shares
– Amendment of the Company’s articles of association
– Appointment and replacement of directors
– Powers of the directors
By order of the Board
M J Robinson
Company Secretary
2 December 2015
Corporate governance report continued
The Sage Group plc | Annual Report & Accounts 2015
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