Risk management Risk management system 03 3.1.4 INTERNAL AUDIT DEPARTMENT The Internal Audit Department assesses both gross and net risks and impacts through a multi-year audit plan, whose periodic audits support the ongoing control exercised by the Internal Control Department. Like the Internal Control Department, the Internal Audit Department’s remit covers the entire Group. The Internal Audit Department assesses the robustness of risk/ impact management levers to measure the residual (net) risks and impacts. If any resulting net risk/impact exceeds the standards set by the family’s Governance Committee, the Internal Audit Department issues recommendations. Each internal audit assignment is championed by a sponsor with the authority to undertake action plans to implement the recommendations and bring the net effect back in line with risk policy standards. Audit findings are also used to define avenues to improvement, making the Internal Audit Department a key enabler in the Group’s continuous improvement process. In addition to risk/impact audits, the Internal Audit Department also performs the following assignments: n post-acquisition audits; n internal control audits; n financial and compliance audits of Group companies; n ad hoc audits, undertaken at the request of members of the Group Management Committee. 3.1.5 CRISIS MANAGEMENT PROCESS The Group has also deployed a cross-functional process to manage crisis situations, which regularly emerge in the course of its business operations. Given its size, the nature of its manufacturing and commercial activities and its environmental and social responsibility, Michelin is exposed to the risk of crises that could affect its business, its customers and its reputation. To foresee, plan for and effectively respond to any such events, a crisis management process is in place and led jointly by the Corporate Internal Audit, Risk Management, Internal Control and Quality Department and the Corporate Anticipation, Prevention and Protection Department. The system’s underlying processes are regularly updated to ensure maximum effectiveness and responsiveness. It is deployed among the various management teams through simulation exercises and appropriate training seminars. The system, which was amply stress-tested during recent crises, is supported by a network of trained crisis managers at every level of the organization, providing dense coverage in units across the entire Group. 3.1.6 GROUP COMPLIANCE TEAM AND NETWORK The Group pays particular attention to risks arising from ethics violations or failures to comply with laws and regulations, which are governed by the Ethics Committee, chaired by the General Manager. Ethics and compliance-related internal control audits are performed by the Compliance Support Group and led by the Chief Compliance Officer. The role of the Chief Compliance Officer, as well as the organization of her corporate-level team (the Compliance Support Group in the Group’s Corporate Legal Department) and the Compliance network, are presented in the Sustainability Statement, section 4.11.1 of this Universal Registration Document. Internal controls to detect and prevent fraud account for 40% of total internal control assignments, which cover information systems and technology, accounting, finance and legal & social processes and are conducted in every Group company. Compliance-focused internal control activities mainly address the following issues: n combating corruption and influence peddling: deployment of the Code of Ethics and the Anti-Corruption Code of Practice, training for all exposed employees and other stakeholders, tracking the third-party due diligence system, gifts and invitations, and regular internal audits of systems in place; n compliance with competition rules: deployment of the dedicated competition compliance program; n protection of personal data: deployment of the Group protection of personal data directive, compliance with the Binding Corporate Rules concerning the transfer of personal data and the processing of health data; n processing Ethics Hotline alerts. In this case, the audits cover employee awareness and deployment of the various channels in the Group’s whistleblowing system, compliance with the internal procedure for reporting alleged incidents, the processing of cases of demonstrated non-compliance and implementation of the related action plans (particularly as concerns the application of disciplinary measures). Tests are performed by the network of internal controllers, alongside those conducted by members of the Compliance Support Group. 158 2024 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
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