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Chairman of the Board and keeps him informed of the
development and financial position of the Company and
the Group.
AAK’s Group management team consists of eleven
persons from five countries: the CEO who is also
responsible for HR, CFO who also is responsible for
Mergers & Acquisitions, Corporate Communications,
and IT, CMO, CTO and President Global Operations, as
well as six persons in charge of business areas/countries.
The Group management team meets every other
month and deals with the Group’s financial development,
investments, synergy and productivity projects, acquisitions,
Group-wide development projects, leadership
and competence supply and other strategic issues. The
meetings are chaired by the CEO, who make decisions
in consultation with the other members of the Group
management team. The Group has a small number of
Group employees, who are responsible for Group-wide
activities, such as financial performance, tax, IT, internal
control, strategy, investor relations, information and legal
issues. The CEO and Group management team are
presented on pages 46–47. For remuneration principles
and salaries and other fees paid to the CEO and Group
management team, please see Note 8.
AAK’s business areas are Food Ingredients, Chocolate
& Confectionery Fats and Technical Products &
Feed. The heads of each business area/region are
responsible for goals, strategies, product development
and day-to-day business issues, as well as for profit,
cash flow and balance sheets for the unit in question.
The business areas in turn are organized into different
sectors with responsibility for day-to-day business
issues. Direction is exercised through internal boards,
which meet four times a year. AAK’s CEO chairs the
meetings. Other executives are co-opted as necessary.
In all countries where AAK has subsidiaries, a Country
Manager has legal charge of operations. The Country
Manager’s task is to represent AAK vis-à-vis public
authorities in the country, to coordinate operations on
the ground, organization and Group-wide procedures/
projects and to ensure that Group-wide guidelines are
complied with. For each such country, one member of
the Group management team has been appointed to
have overall responsibility for operations. This person is
the superior of the Country Manager, and in most cases
acts as Chairman of the local legal board.
The Board’s description of internal control and risk management
relating to financial reporting
The Board is responsible for AAK’s internal control,
the overall purpose of which is to protect the owners’
investments and the Company’s assets. The Board shall
provide a description of how internal control and risk
management relating to financial reporting are organized
in a separate section of this Corporate Governance
Report. Internal control relating to financial reporting is a
process involving the Board, the company management
team and personnel.
The process has been designed to ensure the reliability
of external reporting. According to the commonly
accepted framework established for this purpose,
internal control is usually described from five different
aspects, which are described below. The control
environment forms the basis for internal management
and control. Risk assessment and risk management
mean that the management is aware of and has itself
assessed and analyzed risks and threats to operations.
Control activities are the measures and procedures
designed by the management to prevent errors from
arising and for discovering and correcting errors that do
arise. In order for individual tasks to be carried out in a
satisfactory manner, the personnel in an organization
need to have access to current and relevant information.
The final module of the model relates to follow-up of
internal management and the design and effectiveness
of controls.
Control environment
AAK’s organization is designed to facilitate quick decision
making. Operational decisions are therefore made
at business area or subsidiary level, while decisions
about strategies, acquisitions and overriding financial
issues are taken by the company’s Board and Group
management team. The organization is characterized
by clear division of responsibilities and effective and
established management and control systems, covering
all units within AAK.
The basis for the internal control relating to financial
reporting consists of an overall control environment
in which the organization, decision-making routes,