LISI 2012 FINANCIAL REPORT
135
8
DOCUMENTS SPECIFIC TO THE ORDINARY GENERAL MEETING
management of the group. Their power is limited by the Board
of Directors’ authority to rule on all decisions relating to the
structure of the group, such as described in paragraph 1.1.
Present on the Board of Directors are 4 independent directors, in
compliance with the AFEP/MEDEF Code. There are also 3 specific
committees in existence: the Compensation Committee,
the Strategic Committee and the Audit Committee, both of
which are responsible for supervising the work of General
Management in these 3 fields. Each committee will submit a
report on their work to the Board of Directors.
1.3 Management structure
The Chairman/Chief Executive Officer and the Vice President
work with an Executive Committee of 15 people, drawing
together divisionalmanagers and internal controlmanagement.
This Executive Committee meets every quarter for briefing
meetings on the Group’s latest progress in each area.
1.4 Compensation and benefits in kind
The principles and rules governing corporate officers’
remuneration,whichareverifiedannuallybytheRemunerations
Committee, are detailed in the chapter dealing with corporate
governance policy.
1.5 Internal control procedures
The LISI Group’s current internal control procedures fall
form part of its corporate governance policy as drawn up in
accordance with the latest French financial markets authority
(AMF) guidelines for small- and mid-caps businesses.
1.5.1 Defining internal control procedures
The Group’s current internal control procedures are designed
to ensure that:
• Administrative acts or those implementing operations at all
management unit levels are carried out within the scope of
the guidelines and aims set out by the General Management;
• These acts comply with all relevant laws and regulations and
adhere to the values enshrined by the Group’s companies;
• All accounting and financial data reflect exhaustively and
honestly the Group’s economic situation.
To ensure that these objectives are met, the Group has set up
a prevention and detection process based on the coordinated
audits of the internal audit officer and external auditors (during
the review of internal control mechanisms which takes place
at least once a year in all divisions). This process is then also
implemented in each division, through the deployment policy
of the local auditors.
As with any control system, this preventative scheme is not
exhaustive. Consequently, it cannot provide any absolute
guarantee that all risks have been completely eliminated.
1.5.2 Description of the internal control environment
General description:
The wider internal control environment is based on a
decentralized organization within each division. An Executive
Committee is responsible for ratifying a global policy, which
must then be channeled down to each individual department.
The Group has set out a number of procedures, summarized
in an internal Group control manual, which is available to
all relevant Group staff via an intranet site. This manual is
supplemented by a Group accounting procedures manual.
In addition, the Group has deployed a uniform reporting
and information system in each division using an identical
procedure each time.
The specificities of the LISI Group’s activities require that
precise quality control be carried out on operational processes
in the following areas:
• Production, stock, flow management,
• Quality,
• Health, Safety and Environmental,
• Personnel, payroll,
• Accounting, management control and cash flow,
• purchasing and investments,
• Sales.
Action is taken within the Group on a continual basis to ensure
that these mechanisms are effective. This action is regularly
assessed using performance tables.
Supervisory bodies:
• The Group’s Board of Directors is the most senior decision-
making entity. The group’s Executive Committee channels
the information to the divisions, which are themselves
organized in such a way that enables their management
to carry out the Group’s decisions at individual department
level.
