Oper ational M ana g ement countr y re g ion br anch mana g er F unctional Commit t ee s The Group has es t ablished a number of func tional commit tees and w ork groups includin g the functions for Finance T ax and Assur ance Corpor ate Finance T reasur y and Le gal Risk and Insur ance These commit tees include the Senior V ice President Finance Senior V ice President Corpor ate Finance Senior V ice President G ener al Counsel and the appropriate functional area e xperts The main purpose of these functional commit tees is to determine appropriate policies communicate the policies and ensure local under s t andin g includin g tr ainin g of the policies as w ell as monitorin g k e y issues within each area of responsibilit y Quarterly meetin g s are held with the President and CEO at which topic s that mus t be reported to the Audit Commit tee are discussed P re sident and CE O and Group Management The President and CEO and Group M ana g ement re views per formance throug h a comprehensiv e reportin g sys tem based on an annual bud g et with re gular business re views of actual results analysis of v ariances k e y per formance indica tor s Securit as model for fnancial control refer to pa g es 5051 adapted b y division and re gular forecas tin g This reportin g is also re view ed b y the Boar d Group legal function The le gal function is responsible for maint ainin g an adequate infr as tructure to ensure that le gal mat ter s are broug ht to the at tention of Group M ana g ement in an appropriate and timely manner This function is headed b y the Senior V ice President G ener al Counsel The le gal function also monitor s and mana g es le gal risk e xposures identifed b y the oper atin g units and reports re gularly to Group M ana g ement and Audit Commit tee on le gal risks and on g oin g disputes L ocal and Divisional Management re sponsibilitie s Since Securit as philosoph y is to w ork in a decentr aliz ed en vironment local mana g ement is primarily responsible for monitorin g and ensurin g compliance b y local units with the Group policies and guidelines appro v ed b y the Boar d of Director s includin g an y divisionspecifc policies and guide lines Local mana g ement is responsible for the es t ablish ment and continued oper ations of a sys tem of procedures and controls that ensures the reliabilit y of the compan y s mana g ement and fnancial reportin g information in the mos t economical and efcient manner possible This includes ensurin g a minimum of basic and super visor y controls in or der to mitigate rele v ant risks Local mana g ement reports to Group M ana g ement throug h Divisional M ana g ement on oper ational mat ter s and local controller s report throug h Divi sional Controller s on fnancial reportin g mat ter s In or der for this to w ork Securit as has es t ablished a close link bet w een these diferent le v els of the or ganization Group risk organiz ation The Group risk or ganization is responsible for pro vidin g the oper ational or ganization with opportunities to identif y and mana g e the risks inher ent in Securit as line of busi ness Risk mana g ement is an inte gr al part of the Securit as culture and is imper ativ e for achie vin g Securit as s tr ate g ies and g oals The risk man a g ement process is continu ously e v olvin g Or ganization of internal control Shareholder s C FO Divisional M ana g ement Divisional controller s Local controller s External audit Division auditor External audit Local auditor S VP Finance Group M ana g ement S VP G ener al Counsel Audit Commit tee Group le gal Group risk or ganization Boar d of Director s Direct line of reportin g Coor dination responsibilit y 1 Owner ship of risk 2 A s tron g controller or ganization 3 M onitorin g of internal control 4 Audit Group activities Divisional activities Local activities Risk and control dia gnos tic s per formed b y e xternal parties External audit Group auditor President and CEO F unctional Commit tees M ana g ement Assur ance function for monitorin g internal control M onitorin g M onitorin g is per formed at diferent le v els and b y diferent functions within the or ganization K e y functions include the Boar d of Director s the Audit Commit tee Group M ana g ement functional commit tees mana g ement assur ance the Group le gal function the Group risk or ganization and Local and Divisional M ana g ements 46 Securit as Annual R eport 2012 G o v ernance and mana g ement Boar d of Director s report on corpor ate g o v ernance and internal control