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2018 deadlines. See note 35 to the Consolidated Financial
Statements for information regarding legal matters
affecting the Company. AMG has continuing obligations
to comply with government regulations and practices
concerning corporate organization and corporate governance.
For example, in addressing possible conflicts
of interest affecting its Management or Supervisory
Board members, AMG follows strict rules of procedure.
These procedures are described in the Company’s
Articles of Association and the rules of procedure of the
Management Board and Supervisory Board, respectively.
Also, since AMG’s product mix is increasingly dependent
on scarce natural resources, governmental policies may
restrict AMG’s access to key materials in certain regions
or countries. Compliance with both legal and regulatory
matters is monitored and augmented by the Company’s
General Counsel who makes use of the services of several
prominent local and global law firms.
Information Technology Risk
AMG is dependent on effective and reliable IT systems
that are not currently fully integrated among all business
units. Failure of IT systems or major loss of key data
could substantially impair AMG’s financial condition and
results of operations. Therefore, AMG devises and implements
procedures to protect data, applications, systems,
networks and physical resources. Both internal and
external analyses of weaknesses, risks and threats are
executed and audited to ensure that IT security measures
are implemented efficiently. Special attention has been
paid to logical access, change management and business
continuity. Furthermore, guidance has been strengthened
by distributing additional policies and procedures
throughout the Company. This ongoing process should
ensure that amendments and improvements (such as
continued migration toward an integrated worldwide IT
system) are constantly made to the IT systems.
36 Report of the Management Board | Risk Management and Internal Controls
Risk Monitoring and Procedures
AMG has a strategic risk function that monitors and
establishes internal controls to mitigate business and
financial risks. AMG’s strategic risk function is complemented
by its internal audit function. As a relatively
young public company, the controls and procedures in
place at AMG are in a continuing state of development
and may not be as sophisticated as at other public companies
with much longer operating histories. Through
the risk reporting system, the Risk Manager works
with business unit managers to develop risk mitigation
strategies, where applicable. The purpose of the risk
reporting and monitoring system is to manage rather
than eliminate the risk of failure to achieve business
objectives, and provides only reasonable, not absolute,
assurance against material misstatement or loss.
Statement on Internal Control Pursuant to the
Dutch Corporate Governance Code
Risks related to financial reporting include timeliness,
accuracy and implementation of appropriate internal
controls to avoid material misstatements. During 2010,
the Management Board conducted an evaluation of the
structure and operation of the internal risk management
and control systems. The Management Board discussed
the outcome of such assessment with the Supervisory
Board (in accordance with best practice provision III.I.8).
AMG’s Management Board believes internal risk management
and control systems in place provide a reasonable
level of assurance that AMG’s financial reporting does
not include material misstatements. In relation to AMG’s
financial reporting, these systems operated effectively
during 2010.