Internal Control Instruments
The Board of Directors and the Executive Board of the FMC attach great importance to good corporate management. This includes internal controls and monitoring of risks, regulations and processes by means of integrated multi-level risk management and the development of a systematic compliance programme.
As the internal auditors, Mitreva Interne Revision AG carry out audits. The G. and A. Duttweiler Foundation ensures that the ideas of Migros' founder Gottlieb Duttweiler are adhered to.
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. This comprises risk-based determination of rules, regular communication and training measures appropriate to level, as well as an effective control and sanction mechanism. At the same time, the necessary interfaces to the existing risk management and internal control systems (ICS) are created. As a member of the United Nations Global Compact, Migros also firmly and explicitly supports the fight against corruption in all its forms.
For organisational purposes, the compliance function has been allocated to the FMC Legal & Compliance Directorate and has direct independent access to the Chairman of the Board of Directors. In addition, a quarterly report is submitted directly to the Audit Committee of the Board of Directors on compliance incidents as well as on the implementation status of the compliance measures.
Migros has reinforced its compliance activities based on its firm belief in responsible and credible conduct, business activity that is within the law and adherence to internal guidelines and codes of behaviour which exceed its statutory obligations. In this respect, the integrity of employees is paramount. 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.
At the forefront of the compliance activities in the period under review were the introduction of a new, modern code of conduct for the entire Migros Group, the launch of a specialist internal reporting office, the implementation of internal training and awareness measures, and the further expansion of the central compliance system by means of updated internal guidelines in the core compliance areas.
Risk management
The Executive Board and the Board of Directors of the Migros subsidiaries have identified and assessed the internal and external risks affecting the company and have documented these in risk reports. The risk reports are grouped according to strategic business unit and are checked and approved by the Executive Board and the FMC Board of Directors. The results of the risk assessment have been taken into consideration in the FMC Board of Director's annual review of business strategy.
Internal auditing
The internal audit team performs independent and objective auditing and consulting services geared towards generating added value and improving the business processes. It supports the Board of Directors and executives in achieving their objectives by means of a systematic and target-oriented approach to assessing and improving the effectiveness of risk management, controls (level 3) and governance (management and supervision processes).
The internal audit team also performs procedures to obtain audit evidence and provides the auditor with assurance that the financial statements have been presented properly and in accordance with the applicable accounting standards.
The results and significant findings of the 2014/2015 audit plan were presented to the Audit Committee and the Board of Directors. The internal audit of the Federation of Migros Cooperatives is conducted by Mitreva Interne Revision AG.
G. and A. Duttweiler Foundation
The G. and A. Duttweiler Foundation was established in 1950 by Gottlieb and Adele Duttweiler to ensure that their ideas, as laid down in various scripts, would live on after their deaths. Since the statutes permit the Foundation to take part in the FMC's Assembly of Delegates, it can put forward its views on transactions and proposals. In addition, the Chairman of the Foundation Council can also put forward the Foundation's views at Board meetings. The Foundation members are also regular participants at other official events of Migros committees, such as the meeting of the Cooperative Councils and Delegates.
In the year under review, the Foundation approved the adjustment of the salary bands for the members of the Executive Board and Migros' senior management. In agreement with the Board of Directors, this contractually regulated duty was also extended to the mandate remuneration of the members of the FMC Board of Directors in 2014. These days, it is no longer considered appropriate for an organ to set its own remuneration. The G. and A. Duttweiler Foundation has been addressing the issue of commensurate remuneration since its formation. It therefore has relevant experience and enjoys a high level of acceptance and credibility.
The Foundation Council wants to embed the founders' ideas even more firmly within Migros. In addition to publishing information about the Foundation on the official Migros website, a short publication in the form of frequently asked questions about the ideas of Gottlieb Duttweiler has been composed. It will be distributed to all Migros companies in spring 2015 to help ensure that the ideas of the founders live on and are better understood.
The Foundation Council includes the following seven independent members:
- Peter Birrer (Chairman)
- Claudius Alder
- Hans-Ulrich Frei
- Charlotte Hug-Burnod
- Elena Mattle-Andreoli
- Markus Mosele
- Michel Renevey