Internal Control Instruments

Compliance

Because of its corporate activity, prevention of corruption and guaranteed observance of competition and cartel law constitute central areas of corporate compliance by Migros, alongside product safety and quality. As a member of the United Nations Global Compact, Migros also firmly and explicitly supports the fight against corruption in all its forms. In this respect, the integrity of Migros employees is paramount, and Migros expects all of its employees to take responsibility for their actions, to show consideration for people, society and the environment, to follow rules and to report any breaches.

In the fourth quarter of the year under review, Migros created a central compliance function based on its firm belief in all-round integrity, business activity that is within the law and adherence to internal guidelines and codes of behaviour which exceed its statutory obligations. At the forefront of compliance activities is the formulation of a new, modern code of conduct and the introduction of a central compliance system comprising risk-based framing of rules, regular communication and training measures appropriate to level, and an effective control and sanction mechanism.

In the more recent past, the legislative framework has been progressively tightened up, and the existing guidelines covering the areas of anti-corruption and cartel law have been correspondingly revised and updated. At the same time, the necessary interfaces with the existing risk management and internal control systems are being created.

For organisational purposes, the compliance function has been allocated to the FMC Legal Services Directorate, and has direct independent access to the Chair of the Board of Directors. A quarterly report is submitted to the Audit Committee on the implementation status of the compliance measures.

Risk management

Migros has had an integrated, multi-level risk management concept in place since the end of 2008. Split into external and internal areas of corporate risk, the relevant strategic, financial, operational, political and legal risks are recorded and controlled in risk reports from the individual Migros Group companies. The risk reports are consolidated by the Federation of Migros Cooperatives into Migros strategic business units and submitted to the heads of the strategic business units for approval. The FMC Board of Directors has overall responsibility for risk management. The FMC Executive Board and Board of Directors review and assess the risks presented and approve the consolidated risk reports.

The review process is now in regular operation. In the year under review, coordination of the risk management process was transferred to the Risk & Compliance Officer.

Internal auditing

The Chair of the Board of Directors is responsible for internal auditing, but has delegated this task to the President of the Audit Committee. Audits are conducted on the basis of an auditing plan approved by the Audit Committee. In the year under review, the internal audit team carried out 46 audit inspections and documented them in writing. These are discussed with the management. The results and material findings were presented to the Audit Committee and the Board of Directors. Mitreva Interne Revision AG has been responsible for internal auditing at Migros since 2004.

G. and A. Duttweiler Foundation

The autonomous G. and A. Duttweiler Foundation was set up in 1950 by Gottlieb and Adele Duttweiler. The role of the Foundation is to ensure that the statutes, covenants and ideas of Migros’ founder are adhered to. The ideas of Gottlieb Duttweiler therefore live on in the Foundation that bears his name. Migros continues to be shaped by his vision and commitment to sustainable development. In his set of propositions, dating from 1950, he stipulated that the members of the Boards of Directors and the managing directors of Migros enterprises should not receive any share of profits. They should be remunerated solely in the form of an appropriate fixed salary. Observance of this stipulation is still guaranteed to this day, in that the payment structure (salary bands) of the senior management, which includes the Executive Board, requires the approval of the Council of the G. and A. Duttweiler Foundation. This procedure has stood the test of time and was regulated by covenants with the Cooperatives and the FMC as early as 1957. As long ago as the mid-20th century, Gottlieb Duttweiler recognised the danger of excessive salaries and bonuses and laid down rules for remuneration accordingly.
The Foundation Council consists of the following seven independent members:
Peter Birrer (Chair), Claudius Alder, Hans-Ulrich Frei, Charlotte Hug-Burnod, Elena Mattle-Andreoli, Markus Mosele, Michel Renevey.