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Internal control review | |
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| The board governance policies include a process for the board to review regularly the effectiveness of the system of internal control
as required by Code provision D.2.1. As part of this process, the board, the audit and the ethics and environment assurance committees
requested, received and reviewed reports from executive management and the management of the principal business segments at their regular
meetings. That enabled them to assess the effectiveness of the system of internal control in operation for managing significant risks
throughout the year. These risks included those areas identified in the Disclosure Guidelines on Socially Responsible Investment
issued by the Association of British Insurers. This process did not extend to joint ventures or associates. The executive management presented a report to the January 2004 meetings of both the audit and the ethics and environment assurance committees to support the board in its annual assessment of internal control. The report identified and evaluated significant risks and described the executive management's assurance process. It described the changes since the last annual assessment in the nature and potential impact of significant risks and the continuing development of the internal control systems in place to manage them. Significant incidents that occurred during the year and management's response to them were also described. The report also included an assessment of future potentially significant risks. The two committees engage with executive management throughout the year to monitor their management of these risks. In the board's view, the information it received was sufficient to enable it to review the effectiveness of the company's system of internal control in accordance with the Guidance for Directors on Internal Control (Turnbull). |
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