GE 2009 Annual Report Download - page 28

26 GE 2009 ANNUAL REPORT
Management’s Discussion of Financial Responsibility
We believe that great companies are built on a foundation of
reliable financial information and compliance with the spirit and
letter of the law. For General Electric Company, that foundation
includes rigorous management oversight of, and an unyielding
dedication to, controllership. The financial disclosures in this report
are one product of our commitment to high quality financial
reporting. In addition, we make every effort to adopt appropriate
accounting policies, we devote our full resources to ensuring
that those policies are applied properly and consistently and we
do our best to fairly present our financial results in a manner
that is complete and understandable.
Members of our corporate leadership team review each of
our businesses routinely on matters that range from overall
strategy and financial performance to staffing and compliance.
Our business leaders monitor financial and operating systems,
enabling us to identify potential opportunities and concerns at
an early stage and positioning us to respond rapidly. Our Board
of Directors oversees management’s business conduct, and
our Audit Committee, which consists entirely of independent
directors, oversees our internal control over financial reporting.
We continually examine our governance practices in an effort
to enhance investor trust and improve the Board’s overall
effectiveness. The Board and its committees annually conduct
a performance self-evaluation and recommend improvements.
Our Presiding Director led three meetings of non-management
directors this year, helping us sharpen our full Board meetings
to better cover significant topics. Compensation policies for
our executives are aligned with the long-term interests of GE
investors.
We strive to maintain a dynamic system of internal controls and
procedures — including internal control over financial reporting —
designed to ensure reliable financial record-keeping, transparent
financial reporting and disclosure, and protection of physical and
intellectual property. We recruit, develop and retain a world-class
financial team. Our internal audit function, including members
of our Corporate Audit Staff, conducts thousands of financial,
compliance and process improvement audits each year. Our Audit
Committee oversees the scope and evaluates the overall results
of these audits, and members of that Committee regularly attend
GE Capital Services Board of Directors, Corporate Audit Staff and
Controllership Council meetings. Our global integrity policies —
“The Spirit & The Letter” — require compliance with law and policy,
and pertain to such vital issues as upholding financial integrity
and avoiding conflicts of interest. These integrity policies are
available in 31 languages, and are provided to all of our employees,
holding each of them accountable for compliance. Our strong
compliance culture reinforces these efforts by requiring employees
to raise any compliance concerns and by prohibiting retribution
for doing so. To facilitate open and candid communication, we
have designated ombudspersons throughout the Company to act
as independent resources for reporting integrity or compliance
concerns. We hold our directors, consultants, agents and indepen-
dent contractors to the same integrity standards.
We are keenly aware of the importance of full and open
presentation of our financial position and operating results and
rely for this purpose on our disclosure controls and procedures,
including our Disclosure Committee, which comprises senior
executives with detailed knowledge of our businesses and the
related needs of our investors. We ask this committee to review
our compliance with accounting and disclosure requirements,
to evaluate the fairness of our financial and non-financial disclo-
sures, and to report their findings to us. We further ensure
strong disclosure by holding more than 200 analyst and investor
meetings annually.
We welcome the strong oversight of our financial reporting
activities by our independent registered public accounting
firm, KPMG LLP, engaged by and reporting directly to the Audit
Committee. U.S. legislation requires management to report on
internal control over financial reporting and for auditors to
render an opinion on such controls. Our report follows and the
KPMG LLP report for 2009 appears on the following page.
Management’s Annual Report on Internal Control
Over Financial Reporting
Management is responsible for establishing and maintaining
adequate internal control over financial reporting for the Company.
With our participation, an evaluation of the effectiveness of
our internal control over financial reporting was conducted as
of December 31, 2009, based on the framework and criteria
established in Internal Control — Integrated Framework issued by
the Committee of Sponsoring Organizations of the Treadway
Commission.
Based on this evaluation, our management has concluded
that our internal control over financial reporting was effective as
of December 31, 2009.
Our independent registered public accounting firm has issued
an audit report on our internal control over financial reporting.
Their report follows.
JEFFREY R. IMMELT KEITH S. SHERIN
Chairman of the Board and Vice Chairman and
Chief Executive Officer Chief Financial Officer
February 19, 2010