Plastic Omnium - 2020 Universal Registration Document

RISK FACTORS AND MANAGEMENT Internal control procedures and risk management PLASTIC OMNIUM UNIVERSAL REGISTRATION DOCUMENT 2020 69 THE INTERNAL CONTROL FRAMEWORK The cornerstone of Compagnie Plastic Omnium SE’s internal control system is its Internal Control Framework, which sets out the rules and principles applicable to the companies it controls. It comprises a Code of Conduct, the Group’s Internal Control Rules and Procedures and an Accounting and Financial Procedures Handbook. The Code of Conduct: in addition to its economic responsibilities, Compagnie Plastic Omnium SE attaches great importance to human rights and rules conducive to sustainability. Compagnie Plastic Omnium SE is a signatory of the UN Global Compact, a set of principles that stand alongside the Plastic Omnium Code of Conduct to exemplify the spirit of responsibility that has always encouraged the Group’s commitment. Together, these texts highlight the values governing individual and collective conduct that Compagnie Plastic Omnium SE aims to promote, and which determine the fundamental principles in which the rules and procedures of its internal control system are rooted. In 2010, Compagnie Plastic Omnium SE adopted a Code of Conduct on practices governed by competition law, which has been circulated throughout the Group as part of a compliance program. The Code of Conduct applies to Compagnie Plastic Omnium SE and to all the affiliates in which it holds a majority stake. Compagnie Plastic Omnium SE does everything in its power to encourage other affiliates to establish rules of conduct consistent with the provisions of the Code. It is the responsibility of senior management, members of the Executive Committee, Managing Directors of the Group's business lines and sites managers to ensure that all employees are aware of the contents of the Code, and that they have sufficient resources to comply with its provisions. In return, the Code requires individual employees to behave in a way that demonstrates a personal and ongoing commitment to complying with the prevailing laws and regulations, and with the ethical rules it lays down. Group Internal Control Rules and Procedures: Compagnie Plastic Omnium SE has a set of rules that define the roles and responsibilities of senior management, the Corporate Departments of Compagnie Plastic Omnium SE and the Operational Departments of its businesses and subsidiaries in the following areas: Legal Affairs and Corporate Governance; ● Health, Safety and Environment; ● Human Resources; ● Treasury (financing and routine transactions); ● Sales; ● Purchasing (operations and capital expenditure); ● Inventory and Supply Chain; ● Automotive Projects; ● Accounting and Taxation; ● Production and Quality; ● Real Estate; ● Information Systems. ● The rules cover routine and non-routine business operations alike. They are a single and comprehensive reference framework designed to ensure that the internal control procedures implemented by the Group are both consistent and appropriate. In a number of cases, they include procedures that describe their application. The Accounting and Financial Procedures Handbook: Compagnie Plastic Omnium SE has an Accounting and Financial Procedures Handbook prepared in accordance with IFRS standards. These accounting procedures are applicable to all consolidated companies. As part of a process of continuous improvement in terms of internal control, the Internal Control Framework is subject to additions, and regular updates to reflect established practices, as well as changes in organization and the applicable regulations. RISK MANAGEMENT The main risks to which Compagnie Plastic Omnium SE is exposed are described in chapter 2.1 “Main Risk Factors.” This section also describes the key measures and processes used to effectively prevent and manage these risks. The risk management system incorporates, as part of the organizational framework presented in this report, a process of mapping and analyzing the main risks facing the Company, the purpose of which is to verify the pertinence of approaches implemented at Group level and to take action to strengthen or complement existing approaches. At Group level, this process is led by the Risk Management Department in conjunction with the operational management teams and Corporate Departments. The system is overseen by senior management. CONTROL ACTIVITIES Compagnie Plastic Omnium SE seeks to combine the responsibility and independence of judgement of the three levels of control over its operations and its risk-control procedures: the Operational Management Departments, Corporate Departments and Internal Audit. The operational management teams implement the structures and resources necessary for the satisfactory implementation of the rules and principles governing internal control in their respective activities. They are tasked in particular with assessing the pertinence of remedial measures implemented as a result of assignments undertaken by Internal Audit. They are also responsible for identifying the risks inherent to their own activity and for taking reasonable steps to control them. The Corporate Departments, namely Human Resources, sustainability, Corporate Finance and Information Systems, and Legal Affairs, have the broadest powers in their areas of expertise, and under the supervision of senior management, to establish rules and procedures applying within Compagnie Plastic Omnium SE. They are tasked with coordinating and monitoring the activities of their functional networks with a view to protecting the interests of the Group and all its stakeholders.