CONTENTS - Capgemini

internal control procedures cannot provide an absolute guarantee
against risk, any more than they can guarantee that the Group’s
performance objectives are met.
Internal control procedures mainly concern two levels of the
Group’s organization:
Group Management has prepared, drafted, approved and distributed
a set of rules and procedures known as the Blue Book. A
copy of the Blue Book is issued to each employee of Cap Gemini
S.A. and its subsidiaries, and compliance is mandatory irrespective
of function, position or Business Unit. It outlines the overall
security framework within which the Group’s activities must be
conducted, and describes the tools and methods to be deployed
in order to exercise the necessary degree of control and reduce
the risks identified in each of the Group’s main functions.
Individual Business Units supplement the Blue Book with specific
instructions designed to bring Group internal control procedures
into line with the relevant laws, regulations and customary
practices in their country of operation, and to provide more
effective control over specific local risks.
The Group’s multidisciplinary Internal Audit function, composed
of 18 auditors, reports directly to both the Group’s Chairman and
its Chief Executive Officer. It is tasked with reviewing the internal
control procedures set up within the Business Units, to ensure
that they comply with the principles and rules laid down by the
Group, and with monitoring their application. It independently
assesses the effectiveness of these internal control procedures
given that, irrespective of how well they are drafted and how
rigorously they are applied, they can only provide reasonable
assurance – and not an absolute guarantee – against all risks.
Each Business Unit is audited in line with a bi-annual program
that both the Chairman and the Chief Executive Officer have the
power to modify in the event of a contingency or delay or major
divergence from budgetary commitments. In 2006, the Internal
Audit team fulfilled 38 engagements – i.e., 1,500 days of field
audits – throughout the Group’s various Business Units.
The Internal Audit Director reports annually on the team’s activities
to the Audit Committee as regards the preparation and
processing of the Group’s accounting and financial information.
However, the Internal Audit Director may at any moment draw
up a special report for the Chairman or the Chief Executive
Officer on any matter that he considers should be brought to
their attention.
3.2 General organization of internal control
procedures
The Group’s internal control procedures are based on a close-knit
executive management structure, clear lines of organization at
operational level and clearly defined processes and methods.
3.2.1 Close-knit executive management structure
A close-knit executive management structure has been set up to
model, explain, foster adherence to, apply and control implementation
of the decisions and strategy defined by the Board of
Directors. This structure is built around three main bodies:
The Executive Committee composed of 9 members: the Chief
Executive Officer, the Deputy Chief Executive Officer in charge
of finance, IT and procurement, the General Secretary, the
Communications Director, the Strategy Director, and four directors
from the Group’s main Business Units (Western Europe,
Continental Europe and Asia-Pacific, Outsourcing Services and
Local Professional Services). The members of this committee are
tasked with assisting the Chief Executive Officer in the day-today
management of the Group. It meets formally every other
Monday, and by conference call in the intervening week. The
Executive Committee implements the broad strategies decided
by the Board of Directors, approves budgetary targets and
oversees their implementation (annual and rolling three-year
budgets), and if necessary, takes immediate corrective action
to remedy any failures to deliver those objectives. In addition,
it monitors the adequacy of the Group’s organization in light
of changes in the business environment.
The Group Management Board composed of the nine members
of the Executive Committee plus a variable number of other
senior managers – currently six: the directors of the other main
Business Units (North America and Financial Services), the Production
Director, the Sales Director, the Director in charge of the
global coordination of the Consulting Services businesses, and
the Director in charge of the coordination of Capgemini-Kanbay
operations in India. The Group Management Board usually meets
on a monthly basis to discuss the agenda prepared and decided by
the Chief Executive Officer. Its main brief is to contribute to the
deliberations of the Executive Committee on any matter of general
interest that is submitted to it, and to assist in the implementation
of decisions taken. The Group Management Board also acts as
the Steering Committee for the Group’s Transformation Program
launched in September 2006 and baptized “I cubed” – and whose
project manager also attends all of the meetings.
The Group Finance Department, currently headed up by the
Deputy Chief Executive Officer, which is mainly tasked with:
- preparing budgets and monitoring performance;
- business control;
- operational reporting;
- consolidation;
- accounting processes and standards;
- treasury management;
- taxation;
- mergers and acquisitions; and
- financial communications.
The Group Finance Department also handles procurement, internal
information systems and risk management during the upstream
phase of commercial propositions.
These three management bodies are complemented by a number
of central functions that report directly to the Chief Executive
Officer, and are organized into five central departments:
The General Secretariat, which has particular responsibility for:
- Legal affairs, whose brief is divided between two directors:
one dealing with problems encountered in international operations
and all legal matters related to the Group’s operating
activities; and the other concerned with the functioning of the
Group’s governing bodies (the Board, specialized committees,
Shareholders’ Meetings) and any changes made to the Group’s
legal structure.
- The Human Resources Department, which is tasked with coor-
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