Corporate social responsibility
Health and safety and the environment
Quality, reliability and environmental responsibility go hand in hand
Corporate social responsibility
The group is committed to being a responsible and positive member of the communities in which it operates and recognises the mutual benefits thereto of good corporate citizenship. Acting lawfully and ethically is a prerequisite and in everything the group does it aims to be commercial and fair, to maintain its integrity and professionalism and to respect the needs of shareholders, employees and the local community.
Through its framework of management systems and structures and its formal internal control process which feeds through the organisation culminating (as part of the formal schedule of matters reserved for the board) with board review, any areas of significant risk to the group’s short and long-term value arising from social, environmental or ethical matters affecting the group are identified, assessed and monitored.
Employment
The group is a responsible employer and has adopted corporate values and standards designed to help guide employees in their conduct and business relationships. A core group policy is that of equal opportunity in the selection, training, career development and promotion of employees, regardless of gender, age, racial origin, religion, sexual orientation and whether disabled or otherwise.
Zetex remains committed to creating an employment environment that will attract, retain and motivate employees of high calibre. Throughout the group emphasis is placed upon personal development and training to meet both today’s needs and those of the future. It is group policy wherever practicable to continue to employ and to promote the career development of existing employees who have become disabled.
Zetex remains committed to employee involvement throughout the group. employee communication and consultation is encouraged at all levels on a regular basis throughout the group and employees are systematically provided with information on matters of concern to them as employees.
Board performance evaluation
The board reviews its own performance annually through an internal process using a pre-determined template, designed to act as a tool to facilitate the evaluation process. The assessment covers the functioning of the board as a whole, and a similar review of the effectiveness of the board committees is also carried out. The Chairman also reviews with each of the directors their individual performance, contribution and commitment to the company and any further development of skills. Following discussions with the other directors, the Senior Independent Non-Executive Director similarly reviews with the Chairman her performance. The board considers the results of the performance evaluations when making its recommendations regarding election and re-election of directors. In the current year the board decided to benchmark itself by using external consultants to evaluate its effectiveness. This review is in process and will be concluded by spring 2007.
Internal control
The board acknowledges that it is has overall responsibility for the group’s system of internal control and for reviewing its effectiveness. The system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss. It includes financial, operational and compliance controls, and risk management.
The board confirms that there is a process for identification, evaluation and management of significant risks to the achievement of the group’s strategic objectives. The key elements of this process are:
- a Risk Committee which reports to the Audit Committee on operating and financial risk issues; and
- regular reports from the Risk Committee and the Audit Committee to the board.
The board is ultimately responsible for the review of risk management processes. A system of embedded risk management, which has been in place throughout 2006, helps to safeguard the company’s assets. The Risk Committee is responsible for the development of risk management strategy and processes within the company and for overseeing the implementation of this strategy. It does this by ensuring the company’s framework for the identification, assessment, mitigation, documentation and reporting on all areas of risk is ‘fit for purpose’ and that appropriate assurance arrangements are in place in relation to these risks. Throughout the year the board receives reports from the Audit Committee and the Risk Committee to confirm compliance with all major internal and external requirements along with the existence of appropriate controls and processes to manage risks and to provide details of material risks and control weaknesses.
The Risk Committee comprises two executive directors, one non-executive director and other senior management and normally meets at least four times a year for the purpose of developing risk management and assurance practices across the business, sponsoring activity to promote the development of enhanced risk awareness generally and assigning appropriate responsibility for risk management within the organisation. In December 2006, Professor Jim Norton joined the committee as a representative of the non-executive directors.
Specifically it reviews the risk strategies, policies, management, initiatives, targets and the risk performance of the business and, where appropriate, its suppliers and contractors. This incorporates the building of a risk aware culture within the organisation through training and education, developing risk response processes, including contingency and business continuity and championing risk management at strategic and operational levels.
Risk assessment and evaluation take place as an integral part of the annual strategic planning cycle which allows Zetex to identify country specific risks. The process of risk management identifies mission critical activities to define the processes through which the committee systematically seeks to identify, analyse, assess, treat and monitor the business risks faced by the company. These business risks, together with the identified mitigating measures and responsibilities, are then recorded in risk registers.
Once any risks have been identified which might hamper achievement of the strategic objectives, each committee member is required to document how these risks will be managed and what mitigating activities have been put in place in respect of each significant risk. Processes have been established for reporting and managing any material failures.
The board confirms that this process accords with the Turnbull guidance, is regularly reviewed and has been in place for the year under review and up to the date of approval of this annual report.
The Audit Committee has reviewed the effectiveness of the above system of internal control during the period covered by this report and has reported to the board on the result of this review.
The group maintains as a primary objective the highest standards of safety for its employees and the public. The group operates comprehensive health and safety policies and management programmes, which are an integral part of the internal control risk management process. Copies of the group’s health and safety policy in place and approved by the board are available from the Company Secretary or can be accessed via the link below.
Environmental management is regularly monitored by the board through the group’s internal control risk management process. Copies of the group’s environmental policies in place and approved by the board are available from the Company Secretary or can be accessed via the link below. The group remains committed to continual improvement in its environmental performance with progress being made during the year.
Zetex was granted ISO14001 registration in March 2006.
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