Information and control instruments of the Board of Directors
The Board of Directors determines in which manner it is to be informed about the course of business. Any member of the Board of Directors may demand information on all issues relating to the Group and the company. All Directors may request information from the CEO through the Chairman of the Board of Directors. At meetings of the Board, any attending member of the Executive Committee has a duty to provide information. All members of the Board of Directors have a right to inspect books and files to the extent necessary for the performance of their tasks.
1. Financial reporting
The Board of Directors is informed on a monthly basis about the current course of business, adopts the quarterly reports (with the exception of the report of the first quarter of the year, which is to be adopted and released by the Audit Committee) and releases them for publication. The Board of Directors discusses the Annual Report, takes note of the auditors’ reports, and submits the Annual Report to the general meeting for approval.
With regard to Group strategy development, a strategy plan, a financial plan, and an annual budget are submitted to the Board of Directors.
2. Business Risk Management
Holcim benefits from many years of experience with risk management that was implemented in 1999. The risk assessment process is established across the Group covering the consolidated Group companies and their relevant business segments.
Group Risk Management (GRM) analyzes the Group’s overall risk exposure and supports the strategic decision-making process. Therefore, the RA process is closely linked with the Group’s strategic management process. The full risk spectrum, from market, operations, finance and legal, to external risk factors of the business environment, is reviewed, including compliance and reputational risks. The risk assessment is not limited to a hazard analysis, but also identifies measures and possible opportunities.
The Group’s risk profile is established by top-down, bottom-up and functional risk assessments which are combined to a Group 360° risk analysis. GRM involves the Board of Directors, the Executive Committee, corporate function heads and the Group companies in the risk assessment that is aligned with the Group’s management cycle. The Executive Committee reports regularly to the Board of Directors on important risk findings.
The risk assessment process consists of several steps. First, risks as well as opportunities are assessed and prioritized according to significance and likelihood. Top risks are analyzed more deeply regarding their causes and a risk treatment is defined. The consolidated Group risk profile is established and Group risk initiatives are set up and monitored on their progress during the year. Information gathered in the process is stored in a protected, centralized database.
Responsibilities concerning risks are clearly defined at Group company and corporate level. The underlying principle is that risk management is a line management responsibility with GRM forming part of the second line of defense and Internal Audit forming the third line of defense. In 2014, the corporate function GRM within Corporate Finance & Treasury was responsible for the risk management process and timely reporting by the Executive Committee to the Board of Directors.
3. Internal Audit
Internal Audit assures the existence and pertinence of process controls and integrity of information. For more details, see chapter Risk Management and Internal Audit. Internal Audit reports to the Chairman of the Audit Committee and periodically informs the Audit Committee. The members of the Board of Directors have access to Internal Audit at all times. Each year, the Audit Committee defines the audit focal areas to be addressed by Internal Audit, and the Head of Internal Audit periodically updates the Audit Committee on the activities of Internal Audit.