2013 Registration document and annual financial report - page 126

Registration Document 2013
Corporate Governance
Report of the Chairman of the Board of Directors
Duty of discretion and confidentiality
Pursuant to Article 15 of the Company’s Bylaws, directors shall be
bound by a duty of discretion and confidentiality in the interest of the
Company.To that end, they undertake that they shall be responsible for
maintaining the professional secrecy of all the confidential information
to which they have access, the resolutions and the operation of the
Board of Directors and of any Committees to which they may belong,
as well as the content of the opinions issued or votes cast during
Board or Committee meetings.
When requested by the Chairman and Chief Executive Officer, each
director agrees to return or destroy immediately any document in
his/ her possession containing confidential information.
In addition, directors shall be required to consult with the Chairman
and Chief Executive Officer prior to any personal disclosure that they
may make in the media on matters involving or likely to affect the
Group, the Company and/or its governing bodies.This provision shall
not apply to directors who concurrently hold the position of Chief
Executive Officer or Deputy Chief Executive Officer and who may
have to make disclosures in that capacity in the name of the Company.
Shares owned privately
Pursuant to the Company’s Bylaws, directors must own 500 shares in
the Company. Such shares and any shares acquired in excess of that
number must be registered shares.The permanent representatives of
legal entities that are directors shall be subject to the same obligation.
The number of Company shares owned by each director (and each
permanent representative of any legal entity that is a director) shall
be publicly disclosed by the Company.
3.2.2. INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES Internal control objectives of the
parent company
The Group applies the internationally recognized definition of
internal control formulated by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). According to
this definition, internal control is a process, effected by an entity’s
Board of Directors, management and other personnel, designed
to provide reasonable assurance regarding the achievement of
objectives in the following categories:
effectiveness and efficiency of operations;
reliability of financial reporting;
compliance with applicable laws and regulations.
This definition complies with that set out in the Reference
Framework for Risk Management and Internal Control Systems
issued by the AMF, which states:
“Internal control is a Company’s system, defined and implemented
under its responsibility, which aims to ensure that:
laws and regulations are complied with;
the instructions and directional guidelines fixed by Executive
Management or the Management Board are applied;
the Company’s internal processes are functioning correctly,
particularly those implicating the security of its assets;
financial reporting is reliable;
and generally, contributes to the control over its activities, to the
efficiency of its operations and to the efficient utilization of its
By helping to anticipate and control the risks involved in not
meeting the objectives the Company has set for itself, the internal
control system plays a key role in conducting and monitoring its
various activities.
One of the objectives of the internal control system is therefore
to anticipate and control the risks arising in the course of the
Company’s business, as well as the risk of errors or fraud, particularly
in the areas of accounting and finance. However, as stated in the
AMF’s Reference Framework, internal control procedures cannot
provide an absolute guarantee that the Company’s objectives will
be achieved, no matter how well the system is designed or how
well the procedures are applied.
The following description of the Company’s internal control and risk
management systems was prepared based on the aforementioned
Reference Framework and its application guide. Summary description of internal
control and risk management
The internal control and risk management procedures described
below cover the parent company and all of its consolidated
subsidiaries. Whenever a new entity is consolidated, it implements
a systematic plan to deploy the internal control procedures and
it is included in the audit plan on a priority basis. The Audit and
Risks Committee pays particular attention to ensuring that these
plans are properly implemented.
Overall organization of the internal control and
risk management systems
Main participants
Internal control and risk management procedures are part of the
policies defined by the Board of Directors and are implemented
under the direct responsibility of the heads of the operating divisions
and corporate functions. Internal control and risk management
are everyone’s responsibility, from executive officers to front-line
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