Investor Presentaiton
CORPORATE GOVERNANCE STATEMENT
compensation and makes decisions regarding senior
management appointments and compensation. 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 Chairman of the
Board and the President and CEO
KONE Corporation's Board of Directors appoints Chairman of
the Board, the possible executive Vice Chairman of the Board
and the President and CEO. The Board determines the terms
and conditions of employment of the executive Vice Chairman
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 Chairman 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 Chairman 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 issues 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
AND INTERNAL AND EXTERNAL AUDIT AT
KONE
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 the 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 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
process is designed to ensure that any deviations from plans,
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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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