A N N U A L R E P O R T - Bouygues

The Group’s human resources charter also contributes
to the spreading of the Group’s culture
by reminding everyone that the company’s
development is primarily dependent on people.
For their part, the operating divisions have
been engaged for a number of years in the
important task of raising awareness among
their employees of the risks inherent in their
businesses, so that these can be more successfully
controlled.
1.4.2. Objectives / activities and
control procedures - risks
Objectives / Management cycle
The introduction of internal control procedures
is linked to the definition of objectives that are
compatible with the risks to which the Group is
exposed.
• The Group’s general objectives are defined
through the management cycle, a process
which enables the Group’s general management
to participate upstream in defining the strategies
of each operating division, to approve
their business plans prepared in the context of
that strategic framework, and then to monitor
the progressive achievement of the objectives
during the course of the year.
The principles of the management cycle are
directly applicable in all Group entities, thus
ensuring that the Group as a whole has a solid
and coherent structure.
This iterative process enables the Group’s general
management at all times to ensure that
the objectives are consistent with the strategies,
to monitor any discrepancies between the
results and the objectives, and to anticipate
the remedial measures to be taken at the
level of the Group or of the operating division
(financing requirements, redefinition of priorities,
etc.).
Another aim is to provide the Group’s general
management and the Bouygues Board of
Directors with all the information necessary for
them to take decisions.
The principal members of the parent company’s
general management attend board meetings
of the companies at the head of the Group’s
operating divisions, and it is those boards
that decide the strategic options and business
plans.
Strategic plan and business plan
Each operating division defines its own medium-term
strategic plan (over a three-year
period) taking into account the Group’s general
strategy and its own particular characteristics.
The strategic plan is presented to the Group’s
general management by the general management
of each operating division and in June to
the Bouygues Board of Directors.
The resulting action plans form the basis of
the three-year business plans, and these are
presented to the Group’s general management
by the general management of each operating
division and in December to the Bouygues
Board of Directors.
Business plans are adjusted in March to take
account of the accounts for the previous financial
year and of any significant developments
affecting the initial plan.
Annual plan
In the December business plan, the plan for the
first year is the most detailed, representing a
commitment by each operating division to the
Group’s general management. This is known as
the annual plan.
A first review of progress (or an update) of the
annual plan for the current year takes place in
June, when the strategic plan is presented to
the Group’s general management.
A second update takes place in November, and
is incorporated into the new business plan.
• Alongside the Group’s general objectives, the
parent company also sets more specific objectives
relating, in particular, to the reliability
of financial information, essential for a listed
company, or to compliance with laws and regulations,
which is essential to the Group’s success.
Activities and control procedures
Internal control implies the identification and
analysis of factors that may hinder the achievement
of objectives (concept of risks) and in some
cases the introduction of the means to control
such risks. It is characterised by the existence of
bodies or structures exercising internal control,
and the implementation of control standards and
procedures.
Major risks of a general nature
• The various committees (major risks - QSE -
sustainable development)
In 2002, as part of its policy to control major
risks, the parent company set up a major risk
management committee whose task was to
improve major risk management procedures
within the various operating divisions.
This committee, which existed until 2005, was
wholly successful in carrying out its task since
it raised the awareness of all the operating divisions,
which set up procedures and/or structures
for the management of major risks (risk
analysis, crisis management, training, etc.).
The principal issues examined by the operating
divisions, depending on their activities, relate
in general to:
- technological risks,
- environmental risks,
- health risks and
- protection of strategic assets.
Since 2005, Bouygues has continued to have
an organisational role as regards QSE and
sustainable development, in relation to which
two committees comprising senior executives
from the operating divisions meet regularly
under the chairmanship of Olivier Bouygues
to discus matters considered essential by the
parent company.
• Guidelines for major risk management
The parent company has laid down guidelines
for major risk management at Group level with
which subsidiaries are required to comply,
while remaining entirely responsible for management
of their own risks, with general management
intervening only in exceptional cases.
These guidelines encourage subsidiaries to
introduce a risk control process that includes
the following stages:
- identification and classification,
- assessment, selection and prioritisation,
- treatment, control, monitoring and supervision.
The guidelines also encourage subsidiaries to
establish a crisis management system which
includes a definition of alert thresholds and the
organisation of a duty roster.
In addition, the parent company organises
crisis management training sessions for senior
executives.
• Legal aspects
The Group’s Corporate Secretary monitors matters
with significant legal implications for the
Group.
In this context, the Corporate Secretary and
the parent company’s lawyers may occasionally
become involved alongside the operating
divisions in handling major disputes or matters
having an impact at Group level.
Bouygues’ Corporate Secretary chairs the
Group’s legal committee which is made up of
the legal directors of the operating divisions.
He thus coordinates and supervises all the
Group’s legal affairs.
At parent company level, in addition to the
powers of representation vested in corporate
officers (Chairman & CEO, Deputy CEOs), there
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