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required for the Board to reach well-informed decisions.
The CEO also maintains continual dialogue with the
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 twelve
persons from five countries: the CEO, Chief Financial
Officer (CFO) who is also responsible for Mergers &
Acquisitions, Corporate
Communications, Global IT
and Global Foodservice, Chief Strategy & Sustainability
Officer, who is also responsible for People and
Corporate Branding, Chief Technology Officer (CTO),
President Global Operations and President Global
Sourcing & Trading, as well as five persons in charge
of business areas/regions/industries and one Senior
advisor. 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 50–51. 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 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