Grupa LOTOS S.A. - Integrated Annual Report 2012
In the reporting period, an assessment for Grupa LOTOS’ organizational maturity in 2012 was performed. The exercise is undertaken annually, since 2011, by the Company’s internal audit function.
The organizational maturity of a corporation is the level of professionalism of its key organizational solutions, processes and activities, as well as their consistency with the best operating and management practices, which determine the organization’s potential to achieve success in terms of stakeholder protection and stakeholder value creation.
In connection with the approach to management we have adopted, which assumes continuous improvement, we have been taking steps to obtain an objective assurance as to the maturity of solutions adopted with respect to:
- internal control,
- risk management,
- abuse prevention,
- corporate governance.
Each system was assessed using a model tailored specifically to our needs, based on best business practice, such as the GRC (ang. Governance, Risk Management, and Compliance) Open Compliance & Ethics Group and other recommendations related to corporate governance, e.g. those contained in the Code of Best Practice for WSE Listed Companies. The model envisages a uniform approach to reviewing and assessing the design of the individual systems, as well as assessing the consistency of the systems’ operation with their design. With the model in place, it is possible to assess each of the systems and make a comprehensive assessment of the organizational maturity of the Company as a whole.
- Within the framework of the internal control system, we have put in place key organizational and process solutions, designed to the best practice standard. We have defined the organizational structure, developed organizational rules, determined the allocation of key functions within the organization and adopted formal standards by which to formulate internal regulations. The Company has in place a management reporting system as well as an economic and financial performance reporting system. In addition, there is a process for monitoring and assessing solutions which constitute the internal control system. The key organizational and process solutions which constitute the framework of the internal control system work as designed.
- Within the framework of the risk management system, we have put in place all key solutions needed to correctly design its operation. The Company has developed and communicated an enterprise risk management policy, and appointed participants of the risk management process, including risk owners, Risk Management Coordinator and Risk Management Committee. Detailed internal regulations have also been established defining the manner in which to operate and take appropriate actions within the framework of the risk management system. The Company has developed and put in place a system framework which is key to ensuring that the system meets its objective of effectively supporting the management process and creating value added. The key organizational and process solutions which constitute the framework of the risk management system work as designed.
- Within the framework of the compliance system, active steps are taken to ensure compliance of the Company’s activities and internal regulations with the applicable provisions of the law. The Company also takes care to ensure compliance of its practical actions with the requirements laid down in the organization’s internal regulations. Responsibility for ensuring compliance has been formally assigned. The key organizational and process solutions which constitute the framework of the compliance system work as designed.
- Within the framework of the abuse prevention system, new solutions were introduced in 2012. An Abuse Prevention Policy was developed and communicated, and the duties of responsibility for and coordination of related activities were assigned to appointed individuals. Channels for reporting suspected instances of abuse were established, along with relevant organizational and process solutions. Education and awareness raising initiatives were undertaken amongst staff, focusing on abuse prevention and relevance of the system. Moreover, foundations were laid for building a desirable ethical culture, for which key solutions were developed in 2012 to support the achievement of objectives in this area, for instance the LOTOS Group’s Code of Ethics put in place in January 2013. The key organizational and process solutions which constitute the framework of the abuse prevention system work as designed.
- Within the corporate governance system, we have established most key solutions, including solutions governing the relations between the Company’s corporate bodies and related to its approach to managing the organization and its resources, which are consistent with the applicable standards and best practices. Among other things, the Company has defined its approach to managing the organization and established solutions providing for formal allocation of tasks to staff and managers, evaluation of their performance and remuneration in accordance detailed policies. A dedicated organizational unit has been set up with the role of developing, implementing, maintaining and enhancing management systems and exercising supervision over the organizational processes and structures. The Company’s mission, vision and strategic objectives have been defined. A dedicated internal audit unit has been established to support the Board in managing the organization, by carrying out the audit functions with respect to core areas of the Company’s operations. Moreover, the Company is active in the CSR area, for which a LOTOS Group-wide strategy has been formulated and periodic reports are published). The key organizational and process solutions which constitute the framework of the corporate governance system work as designed.
The results of the assessment of the Company’s organizational maturity in 2012 testify that we are an organization oriented towards increasing professionalism and adoption of solutions amounting to the best operating and management practices. The standards of design and consistency with the design were rated as “high” in the case of most systems, although there are differences with respect to the adoption and application of best practices in individual areas covered by the assessment.