Investor Presentaiton
CORPORATE GOVERNANCE STATEMENT
compensation, makes decisions regarding senior
management appointments and compensation and oversees
the succession planning of senior management, including the
President and CEO. The Committee also decides on the
compensation systems to be used, and prepares the
remuneration policy and remuneration report for the
company's governing bodies.
MANAGEMENT
Chairman of the Board, executive Vice Chair of the
Board and the President and CEO
KONE Corporation's Board of Directors appoints the
Chairman of the Board, the possible executive Vice Chair of
the Board and the President and CEO. The Board determines
the terms and conditions of employment of the executive Vice
Chair of the Board and the President and CEO, and these are
defined in their respective written contracts. The Chairman of
the Board and the Vice Chair of the Board prepare matters to
be considered by the Board together with the President and
CEO and the corporate staff. The Chairman of the Board, the
Vice Chair of the Board and the President and CEO are
responsible for the execution of the targets, plans, strategies
and goals set by the Board of Directors within the KONE
Group. The President and CEO is responsible for operational
leadership within the scope of the strategic plans, budgets,
operational plans, guidelines and orders approved by KONE
Corporation's Board of Directors. The President and CEO
presents operational matters to the Board and is responsible
for implementing the decisions of the Board.
Executive Board
The Executive Board supports the President and CEO in
executing the corporate strategy. The Executive Board follows
business developments, initiates actions and defines
operating principles and methods in accordance with
guidelines handed down by the Board of Directors and the
President and CEO. The Executive Board holds regular
monthly meetings and additional meetings as required.
RISK MANAGEMENT, INTERNAL CONTROL,
RELATED PARTY TRANSACTIONS AND
AUDIT
KONE Corporation's Board of Directors has ratified the
principles of risk management, internal control and internal
auditing to be followed within the Group.
Risk management
KONE's Risk Management function coordinates and develops
a systematic assessment of risks and opportunities within
core business planning and decision-making processes
together with the Strategy Development function.
KONE's Risk Management function oversees and
facilitates the assessment of risks and opportunities related to
KONE's business environment, operations, assets and
financial performance in order to limit unnecessary or
excessive risks. KONE's business units are responsible for
identifying, assessing and managing risks that can threaten
the achievement of their business objectives as part of the
strategic planning and budgeting processes. Key risks are
reported to the Risk Management function, which consolidates
the risk information to the Executive Board. The Board of
Directors reviews the KONE risk portfolio regularly based on
the Executive Board's assessment. The ownership of
identified risk exposures is assigned to specific business
units, and the Risk Management function facilitates and
follows up the execution of the identified actions.
Internal control
The goal of KONE's internal control system is to ensure that
the Group's operations are efficient and profitable, risks are
managed, eliminated or mitigated to an acceptable level and
that the financial and operational reporting is reliable and in
compliance with the applicable regulations, policies and
practices.
The Board's Audit Committee monitors the efficiency and
functioning of the internal control process. The management
is responsible for establishing and maintaining adequate
internal controls and for monitoring their effectiveness as part
of operative management. This is supported by a dedicated
Internal Controls function, which is responsible for facilitating
and coordinating the internal control design, implementation
and monitoring across the organization.
The KONE internal control framework is built and based
on corporate values, Code of Conduct, a culture of honesty
and high ethical standards. Such framework is promoted by
dedicated leadership, training programs, a positive and
disciplined corporate culture and working environment as well
as by attracting and promoting dedicated and competent
employees.
KONE's internal controls are designed to manage,
eliminate and mitigate the relevant operational, financial, and
compliance risks, and they are linked to KONE's processes
and employee job roles. Controls are supported by global and
local policies and principles, and control design is
continuously maintained by incorporating changes and
developments from the business operations and information
systems.
KONE's business units are responsible for implementing
the control framework and for monitoring adherence of
globally and locally agreed policies and principles. Global
Finance and Control has the oversight responsibility of the
overall framework.
Internal control procedures over financial reporting
Correct financial reporting in KONE's internal control
framework means that its financial statements give a true and
fair view of the financial performance of the operations and
the financial position of the group and that such statements do
not include intentional or unintentional misstatements or
omissions both in respect of the figures and level of
disclosure.
Corporate-wide financial management and control of
operations is coordinated by the Global Finance and Control
function and implemented by a network of subsidiary and
business entity Controllers within KONE.
KONE's monthly business planning and financial reporting
process represents a key control procedure within KONE in
ensuring the effectiveness and efficiency of operations. This
process includes in-depth analyses of deviations between
actual performance, budgets, prior year performance and
latest forecasts for the business on multiple levels of the
organization. The process covers financial information as well
as key performance indicators that measure the operational
performance on a business unit and corporate level. The
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More information
The most significant risks and uncertainties related to
KONE's business are described in the Board of
Directors' Report. Financial risk management is
described in note 2.4 and 5.3.
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