Financial Report and Registration Document 2010 - Groupe Seb

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CORPORATE GOVERNANCE
CHAIRMAN’S REPORT ON INTERNAL CONTROL
CHAIRMAN’S REPORT
ON INTERNAL CONTROL
In accordance with Article 117 of the French Financial Securities Act
of 1 August 2003, and the provisions of Article L. 225-37 of the French
Commercial Code, as amended on 3 July 2008 (law No 2008-649), the
object of this report is to describe the organization of the work of the Board
of Directors, and the internal control procedures adopted by Groupe SEB
for the year ended 31 December 2010.
This report, drawn up under the supervision of the Chairman, is essentially
based on the coordinated work of the Group’s Audit and Organization
department, in liaison with the Finance department and the main corporate
support functions and operational management. It also takes account of
consultations with the Audit Committee and the Statutory auditors.
This report was approved by the Board of Directors on 25 February 2011.
In accordance with the new provisions of the law of 3 July 2008 which
requires each company to identify which Corporate Governance Code it
abides by, Groupe SEB hereby indicates that it abides by the AFEP-MEDEF
Corporate Governance Code of December 2008.
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GROUP INTERNAL CONTROL ENVIRONMENT
In the course of its operations and in pursuit of its business strategy, Groupe
SEB is exposed to a number of risks and unknown factors, both internal
and external. To cope with this situation, it has set up an organization and
procedures aimed at identifying, quantifying, anticipating and managing
these risks as much as possible, in order to reduce their negative impact
and thus to help to achieve the Company’s operational and strategic goals.
The internal control system is a process defined and implemented by the
Group under its own responsibility to ensure:
compliance with laws and regulations;
application of instructions and guidelines, and conformity with the Group’s
internal practices;
the proper functioning of the Company’s internal processes;
the quality, integrity and relevance of its internal and external information,
particularly financial disclosures;
organizational adaptation to changes in standards and regulations;
consistency between identified risks, objectives and expected benefits;
reduced exposure to risks of fraudulent behaviour;
prevention, and, if necessary, punishment of unethical conduct.
As with any control system, it cannot provide an absolute guarantee that
these risks are totally eliminated.
Groupe SEB is an international entity, whose organization is firstly divided
into geographical zones for continents, each with their own ranges of
products to sell. In addition, operations are organized by activity, covering
specific product lines and trademarks. This mode of operating depends on
decentralization of operational responsibilities and extensive delegation.
But at the same time, to guarantee efficient overall management, Groupe SEB
applies clearly-defined operational and delegation rules. It also benefits from
a well-established corporate culture which is rooted in shared fundamental
values that foster an ethical working environment: high-quality work, mutual
respect, team spirit, loyalty and thoroughness.
The internal audit system is based on a structured Quality Management
System defining eleven key functional areas which integrate the demands
and requirements of Sustainable Development.
A signatory of the Global Compact since 2003, Groupe SEB supports the
values set out in this document and promotes them throughout the Company.
The Group Human Resources department states in its guiding principles
that: “The Group is a community of men and women who share the same
objectives and values”.
Against this background, Groupe SEB enjoins all its employees to uphold
ethical standards and act in accordance with them.
The integrity of the internal control function is also assured by an internal
control manual, detailing the main internal control guidelines for each Group
structure:
use of a delegation manual and definition of power limits;
internal control rules governing commercial operations, the management
of customer credit and settlement methods, relations with banking
institutions, payroll management, purchasing control, fi nancial asset
management and the protection of corporate property and assets;
respect for rules governing division of responsibilities;
policies applying to insurance cover and hedging;
financial reporting audit principles.
GROUPE SEB
FINANCIAL REPORT AND REGISTRATION DOCUMENT 2010
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