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Internal control


The Board of directors, the Audit Committee and the Nominations and remuneration Committee
 

The role of these bodies is described in “Organization and Functioning of the Board of Directors”.

 

Group Executive Committee

Their role is described in the “Governing Bodies” section.

 

The Internal Audit department

Internal audit, as defined by professional standards, consists of “an independent and objective process which ensures that the Group has adequate control of its operations and which offers advice on improving the latter while contributing to added value. The internal audit function helps the Group to achieve its objectives by systematically and methodically valuating its risk management, control and corporate governance procedures, and through recommendations for their improvement.”

The role of the Groupe SEB Internal Audit department is fully consistent with this approach.

The Internal Audit department is responsible for evaluating, at all locations where the Group is established and for all functions, compliance with Group Internal Rules and procedures and any non-compliance with legislation, and for ensuring that Group assets are protected. It is also required to evaluate the efficient conduct of operations and to ensure that all business risks are anticipated and controlled.

In the area of risk management, the Internal Audit department draws up a map of high-level risks.

Based on this map, on the self-assessment questionnaires and on the principle of an audit in each entity every three or four years, the Audit department proposes an internal audit plan for the following year.

This plan is submitted to the Audit Committee.

Each internal audit – adapted to circumstances and conducted locally by an average of three Auditors over a two-week period – gives rise to an audit report which is sent to the audited structures and their upline management, to the members of the Group Executive Committee and to the Group Chairman and CEO, describing the basic organization of each process and making recommendations.

Steps are then taken by operational management to remedy identified shortcomings in internal control, and to make any other necessary improvements. The implementation of resulting action plans is subjected to a systematic internal audit review within 6 months of the audit.

The results of these audits are compared with the results of the self-assessments, thus completing the full circle of the internal control process.

In order to ensure continuous improvement of internal control and company efficiency, the main recommendations issued by the Audit department for each process are shared yearly with the Group Management Committee for the main Group divisions: purchasing, IT, quality, finance, human resources, logistics, production, after-sales service and marketing.

The Internal Audit department draws up an annual report of work done which is presented to the Group Executive Committee and the Audit Committee.

The Audit Committee reviews the resources needed by the Internal Audit department to carry out its work, and makes observations or recommendations as required. The Internal Audit department has a staff of ten people.

 

Legal and Insurance department

The role of the Group Legal department is to ensure that the Group complies with legal and regulatory requirements wherever it operates, to protect the Group’s assets and businesses and to defend the interests of the Group, its management and employees in carrying out their functions. The Legal department is concerned with three main areas of internal control:

 it drafts and updates model contracts and their related procedures for frequently recurring transactions (purchases of goods and services, conditions of sale, advertising campaigns, damages claims, etc.);

 participation in the implementation of the integration process within Groupe SEB for legal entities newly acquired by Groupe SEB;

 it makes recommendations to the Group Executive Committee on rules for delegating authority, and on the circulation and protection of confidential information, and it applies and monitors these rules;

 it selects external legal advisors, monitors their services and performance, and oversees invoicing follow-up in liaison with the Management Control department.

 involvement in activating crisis units (fraud, competition inquiries).


The role of the Legal department in the area of insurance is to ensure that there is adequate insurance cover of the risks to which the Group is exposed. Groupe SEB insurance cover is managed on a worldwide consolidated basis. Worldwide insurance cover is arranged in partnership with leading insurance pools; additional specifi c policies can be subscribed to locally.

 

Finance and Treasury department

The role of this department is to ensure the security, transparency and efficiency of treasury and fi nancial transactions, and to ensure compliance with regulations and tax obligations in all the countries where the Group is based.

Its responsibilities in this area cover:

 financial resource management, to ensure the Group’s liquidity;

 cash flow management ;

 financial risk assessment and hedging (particularly in the areas of foreign exchange and raw material prices);

 ongoing relations with banks;

 financial management support for subsidiaries, and support for the Group’s General Management, in financial planning for new projects.

 

 
The Group's centralised credit management activities ar handled by the Finance, Treasury and Tax department. Given the still volatile economic situation in 2015, the Group continued its careful management of customer risk at a worldwide level.

 

Accounting and Tax department

This department is responsible for ensuring that the Group’s accounting principles and standards are compliant with commonly accepted international accounting standards. It closes the Group’s accounts, in collaboration with the entities, in a timely manner. It makes sure that accounting by the subsidiaries is reliable and in compliance with the Group’s accounting principles. It provides the Group’s management and outside partners with pertinent financial information.

The Group Accounting and Tax department oversees and coordinates the shared Corporate Services Centres for Accounting and Management Services. These entities, in France, Poland, Germany, the United States and China, help improve the Group’s internal control system by sharing their procedures and tools.

It ensures compliance with regulations and tax obligations in all the countries where the Group is based. The department has a triple responsibility in the area of internal control:

 monitoring tax inspections carried out by tax authorities in all of the Group’s entities;

 ensuring consistency in the tax procedures used by the Group’s entities and liaising with tax consultants to verify that the Group’s main activities are compliant with current legislation;

   selecting tax consultants and monitoring the services provided along with their cost.

 

The Information Systems department

The Group’s IT system is designed to guarantee the security, integrity, availability and traceability of information.

To ensure the proper use of these tools and the utility of data, an operating manual adapted to the needs of users has been drawn up.

The Group has also introduced procedures to ensure the security of its information systems and the integrity of its electronic data.

An Information Systems Steering Committee is responsible for drawing up an IT master plan which corresponds to the Group’s organizational needs and general development policy. This committee, chaired by the Executive Vice-president, Industry, comprises the Information Systems department and representatives of user entities (including Continental General Management, Strategic Business Areas Management, the Group Finance department and the Human Resources department). Within this framework, it determines the nature of IT system projects and decides on priorities for resource allocation and IT security policies.

The IT data security committee, of which the Audit department is part, meets regularly to ensure that the level of IT risk within the Group and its subsidiaries is adequately managed and that appropriate informational and sensitization measures are taken to prevent the risk of piracy of our systems.

Internal audit missions now include more detailed scrutiny of IT security risk areas, in particular concerning integrated software: user profi le management and the risk of system access rights within an enterprise function.

The risk of intrusion into the network and/or into a centralized application is periodically evaluated and tested.

Data security audits were also conducted in some supplier companies.

 

The Quality department

The desire to improve the quality of its products and processes has always been a central concern of Groupe SEB.

The Group uses a Quality Management System (QMS) with Group-wide standards that are posted on the Company’s intranet.

Documentation for this system includes reference to all procedures, tools and methods relating to the Group’s key processes:

 management procedures, defi nition of Group policy, strategic planning, constant improvement in quality, and safeguarding the environment;
 operational processes including strategic marketing, R&D, sales and marketing, client order processing and production transfers;
 operational support functions, covering human resources, information systems, purchasing, fi nance, after-sales service and customer assistance.


The Quality department uses monthly feedback reporting to fi ne-tune its action plans, which are then submitted to the Group Executive Committee.

The Safety policy, which is also overseen by the Quality Department and was set out in 2013, establishes the safety of people at work as a major area of focus for the Group, broken down in 5 points:
  • reaching a good level of safety;
  • focusing on an ambitious goal;
  • denormalising each accident or serious incident;
  • sharing the same level of skills and requirements, based on common
  • standards;
  • acting promptly upon any recorded non-compliance to address it.
 
The action plans stemming from this policy are established and monitored by a «Strategic health/safety committee» comprising 3 GEC members, and adjusted by an «Operational health/safety committee» covering the Group’s main geographic areas and businesses.
The health and safety organisation within the Quality Department ensures these actions plans are deployed across Group sites.
 
The sustainable development department
 
This department submits the Group Sustainable Development Policy to the Group Executive Committee for approval and then coordinates its implementation. It draws up and implements formal action plans for all of the Group’s divisions, relying on a Sustainable Development Steering Committee with representatives from the Group’s 15 main divisions. By applying sustainable development criteria to the Group’s internal processes, the Group promotes awareness-raising and encourages appropriate behaviour within the Group.
 
The Financial Communications department and Investor Relations

In conjunction with the Legal department, it identifies and complies with legal and regulatory requirements for Group financial and risk reporting. Each year, this department draws up a schedule of the Group’s regular financial communications for financial markets and institutional investors.

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