eurochem-annual-report-2011

Richard Sheath
Audit Committee Chairman, Corporate Governance & Personnel Committee
Q. Where do you see your priorities for the next few years in reporting
and control?
A. We have made tremendous progress on the financial reporting side.
Our annual audited financial statements are now being issued in
mid-February and we will continue pressing management and our auditors
for opportunities to make our reporting systems and controls even more
efficient. EuroChem has always looked to report effectively to its external
stakeholders and it was pleasing to see our annual report nominated for
an award by the UK Investor Relations Society this year; we will now be
looking to develop a better system of key performance indicators and
to integrate these into our external reporting.
On the internal control and risk management front, our priorities in 2012
will centre on consolidating the progress we have made over the past year:
putting a tighter structure around financial reporting controls; improving
the monitoring of investment projects and capital expenditure; embedding
better health and safety risk management processes and awareness; and
strengthening further our environmental risk assessment and monitoring.
We are also very conscious that moving into new areas of raw material
sourcing, production, and distribution generates exposures across the
risk spectrum. Full awareness and the development of effective control
systems will be crucial and the Committee will be overseeing quite tightly
management’s responses to these new areas of activity.
George Cardona
Strategy Committee Chairman
Q. Why do you have a Strategy Committee?
A. EuroChem has numerous important investment decisions to make, some
of them in relation to very large projects which can take years to build and
will be producing revenues for decades; and there are also acquisitions
and disposals. The Committee gives both management and the Board the
opportunity to discuss these matters in greater depth and detail than would
be possible in a full Board meeting. Management finds it useful to have the
Committee provide some challenge and act as a sounding-board. The full
Board will always consider major opportunities and projects, but finds it
very helpful to have the Committee take a closer look – and to review each
opportunity at an early stage.
In 2011, as a Committee, we guided the Company through two
transformational acquisitions as we further consolidated our vertical
integration and expanded our geographical reach. We will continue to focus
on ensuring that we fully capture the resulting synergies while continuing
to strengthen our raw material position. I also see our role as helping
management prioritise and recognise at an early stage any organisational
stresses that might arise from our ambitious investment programme and
growth strategy.
Annual Report and Accounts 2011 EuroChem 67
Corporate governance