10.1 The board of directors must ensure that the company has sound internal control and systems for risk management that are appropriate in relation to the extent and nature of the company’s activities. Internal control and the systems should also encompass the company’s corporate values and ethical guidelines.
10.2 The board of directors should carry out an annual review of the company’s most important areas of exposure to risk and its internal control arrangements.
10.3 The board of directors should provide an account in the annual report of the main features of the company’s internal control and risk management systems as they relate to the company’s financial reporting.
There are three main components of the group’s internal control systems:
- Correct and timely financial reporting
- Compliance with legislation and rules the company comes under, including the company’s own ethical guidelines and basic corporate values
- Use of the controlling function at relevant levels in the organization.
The Marine Harvest Group is decentralised with significant responsibility and authority delegated to the various local business entities in the group. This has significance for the implementation of risk management and the design and implementation of internal control. The local control environment defines how effective the internal control is and the local management teams have the primary responsibility for risk assessment and carrying out control activities. On corporate level group-wide risk control activities are performed on a functional level.
Account controls are ensured through various types of segregation of duties, guidelines and approval procedures. The group’s central accounting department has the overriding responsibility for establishing and following up the guidelines and principles. The group has no department for internal auditing. The different control manuals in place remain to be harmonized.
The auditor produces an annual review of the internal control linked to financial reporting. The auditor’s report is presented to the board of directors. The company uses these reviews actively as risk assessment and as tools for continuous improvement of the internal control systems in the group. The responsibility for the commercial content of contracts and agreements resides with each business area together with the responsibility for fish health, food safety, traceability, hygiene and health, environment and safety. When it comes to follow-up and control in relation to the group’s basic corporate values and ethical guidelines, this is undertaken in the line as part of the day-to-day operations.
The group is still undergoing restructuring in order to capture the synergies following the merger of the three companies. In addition, the operations in Chile are due to the ISA situation, redesigned and downsized to adjust to a lower activity level. This requires strong risk management and internal control as some procedures and the division of responsibilities may be undergoing changes due to the modifications in the operational structure Therefore both the board of directors and management will have a special focus on the efficiency of internal control systems.
The Board has through the year regular thorough reviews of the most important risks of the company with an emphasis on biological and financial risks. The risk mitigation measures and control arrangements in place have been reviewed and revised when deemed necessary.
The company has no deviations from the code of practice.