Peachtree 2015 Annual Report Download - page 73

Risk management and internal controls
The role of the Commiee is to assist the Board in maers of risk
management and internal control.
The Commiee, on behalf of the Board, monitors and reviews the
effectiveness of risk management systems and related internal controls
to ensure that issues that have arisen are properly dealt with, ensuring
that corrective action is taken where necessary, and that going forward
the systems are fit for purpose. During the year, the Commiee:
– Reviewed the principal risks, their risk appetites and metrics, and
challenged their alignment to the achievement of the Sage 2020
strategic objectives. The Commiee’s review considered
management actions and mitigations in place and planned,
to address these risks
– Considered the formal output from the Global Risk Commiee
since its first meeting in August 2015
– Reviewed reports from Global Risk on targeted in-depth reviews
on selected principal risks as outlined on page 38
– Reviewed and approved updates to global policies for which
the Commiee is responsible
– Reviewed Internal Audit and management reports on financial,
compliance and operational risk maers
– Reviewed and monitored the implementation of management
actions to address identified control weakness and improvements
– Considered cases of fraud and identified control issues to assess
whether they are significant or demonstrate material weaknesses
in internal controls
– Assessed the effectiveness of Internal Audit through an external
review as outlined in this report
– Reviewed reports from the external auditor on the Group’s financial
reporting and internal financial control environment, and any issues
identified in the course of their work, including observations on
controls and control weaknesses, and ensured that there is an
appropriate response from management
At each of the Commiee’s meetings an agenda item isreserved for
relevant, current and important issues. The Commiee uses these
sessions to receive detailed briefings on specific areas of the business,
and to further their understanding of the risks associated with them.
During 2015 the Commiee received briefings on the Finance Change
Project which aims to improve the capability and capacity of the Global
Finance function, the North American Business Financial Controls, and
an update against our 2020 Strategy. The Commiee also considered
the evolution of our approach to risk management, internal controls
in our North American payments business and our Excellence in
Governance initiative.
The establishment of the Global and Regional Risk Commiees during
the year has enhanced the governance around risk management, to
support the robust framework that enables the Commiee and the
Board to evaluate on an on-going basis therisk profile of the Group
and adapt its focus in response to any changes to the risk profile. The
Chairman of the Commiee has an open invitation to aend the Global
Risk Commiee meetings or any of the Regional Risk Commiee
meetings. These structures support the transition of the business to
‘One Sage’, and embed consistent risk management activities across
the business. Further detail on these commiees is set out on page 37.
To support these governance enhancements, Sage continues to
develop its risk management team and capability in order to further
integrate its practices into business activities and to allow it to guide,
support and challenge the business in support of its intended growth
and strategy.
Fraud and whistleblowing
Another important component of the Group’s control environment
are its Whistleblowing arrangements, under which the Commiee
is notified of any maers raised through these arrangements or
otherwise that relate to financial reporting, the integrity of financial
management or fraud. There were no cases of fraud which were
significant or that demonstrated material weaknesses in internal
controls during the year. Furthermore, to proactively identify control
failures and to support the Group’s Whistleblowing policy, a programme
of fraud assessments is undertaken across the business as part of a
multi-year cycle.
Assurance
One of the Commiee’s primary areas of responsibility is to review
and approve the nature and scope of the work of the external auditor
and Internal Audit, and management’s related response. The Commiee
considered and approved the planned activities of Internal Audit along
with the scope of the work of the external auditor for the year. Regular
reports were received from both Internal Audit and external auditor
and discussed by the Commiee.
The Commiee is also responsible for ensuring that the external
auditors are independent and responsible for both the seing and
monitoring of compliance with the policy on non-audit services.
Our priorities for 2016 include:
– Overseeingthe effective operation of the Global and Regional
Risk Commiees, as they continue to embed risk management
across ‘One Sage’
– Monitoring progress of the ‘Excellence in Governance’ initiative
as it continues to align the group’s governance framework in
support of our growth ambition
– Promoting a strong compliance and control based culture, and
supporting management as they build capacity and capability
across ‘One Sage’
The Sage Group plc | Annual Report & Accounts 2015 71
FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT