Governance and Assurance

Governance and assurance This chapter presents a portfolio of statements from relevant internal and external stakeholders. These statements relate primarily to our governance and risk management processes, Highlights our management of relevant and material issues and the Actions taken to address recommendations reporting process. This “mission-guided” approach to assurance from the Multi-Stakeholder Forum include: extends beyond the more traditional territory of verifying the accuracy of specific performance data. Instead, it empowers Recognising that the first and second different stakeholders to comment in their areas of expertise on party statements are not technically how well we are managing and reporting on issues identified assurance statements as being “relevant and material” by stakeholders (p8). Ensuring all statements consistently specify dates and locations of completion Statements presented in this chapter should be read alongside and include signatures from each the questions, voices, case studies and interviews with key respective organisation stakeholders presented throughout this report. Together, these viewpoints provide a unique and collective insight into how Using an additional non “big four” well we are responding to, managing and reporting on issues organisation to provide assurance and recommendations on our Kimberley identified as important by our stakeholders. Process compliance. The Government The Multi-Stakeholder Forum has been instrumental in Diamond Office of the United Kingdom shaping the content of this chapter. In particular, we have was seen as more appropriate given its followed recommendations from the Multi-Stakeholder role as a stakeholder in and enforcer of Forum to rename this chapter “Governance and assurance” in the Kimberley Process order to reflect the broad coverage of statements contained Placing emphasis on performance with herein. This also reflects our intent to recognise the difference respect to “relevant and material issues” between those statements prepared by De Beers Internal rather than the standard assurance of Audit and Maplecroft (i.e. as first and second party statements specific performance data on governance and reporting), and those prepared by Balancing both positive and negative independent third parties. stakeholder viewpoints and discussing dilemmas throughout the report 97 The number of workbooks submitted to Société Générale de Surveillance (SGS) for their review of the De Beers Best Practice Principles Assurance Programme 96 De Beers Family of Companies Report to Society 2008 Analysing diamonds using ultraviolet light De Beers Internal Audit (first party) on governance, risk p98 management and selected material issues Maplecroft (second party) on the reporting process, p100 Guide to our portfolio the AA 1000 principles and recommendations of governance and SGS (third party) on the BPP Assurance Programme p102 assurance statements including key findings and recommendations Government Diamond Office (third party) on Kimberley p103 Process compliance at DTC (now renamed De Beers UK Ltd) De Beers Family of Companies 97 Report to Society 2008 On internal Statement from De Beers Internal Audit on selected material issues including internal auditing, the Best Practice Principles, the audit and risk Assurance Programme for the Principles, the Kimberley Process and management anti-money laundering processes De Beers Internal Audit (DBIA) is an Risk-based internal auditing The DBIA annual audit report to the independent, objective assurance and DBIA follows a prescriptive, documented risk- DBsa Audit Committee, which was consulting activity designed to add value based audit methodology that culminates submitted in February 2009, included the and improve the operations of the in its annual report on risk management, following opinion: De Beers Family of Companies. DBIA has the internal control environment and been mandated by the Audit Committee, governance to the Audit Committee. The “I can confirm that in my opinion the a sub-committee of the Board of De Beers audit plan is derived from the De Beers internal controls are adequate to ensure Société Anonyme (DBsa), to ensure that the Enterprise Risk Management system. DBIA that the financial records may be relied major risks facing the Family of Companies consults on and assists with the facilitation on for preparing the reports to directors are identified and given appropriate audit of risk management workshops at all levels and shareholders, and for maintaining focus. Risk management, internal control to ensure a complete and appropriate risk accountability for assets and liabilities. and governance processes are systematically management system. reviewed to help the Family of Companies In my opinion, in all material instances, accomplish its objectives. DBIA submits an The risk management process collates assets are adequately protected and used annual audit report to the Audit Committee information from value centres and offices as intended with appropriate authorisation on the status of governance, internal control globally to business units and ultimately and all significant business risks have been and the appropriateness of risk management. to enterprise level. Audit work includes identified and appropriate mitigating a thorough review of internal systems, strategies are in place. All DBIA reviews are performed in accordance procedures and programmes of work for with the International Standards for the each business function and area of major No matters have come to my attention during Professional Practice of Internal Auditing, as business risk. DBIA also collates and reviews the year ended 31 December 2008 that prescribed by the Institute of Internal Auditors reports from managers on the integrity of indicate any breakdown of such magnitude (IIA). Our Quality Assurance and Improvement internal controls, the safeguarding of assets has occurred in the functioning of these Programme (introduced in line with IIA and risk management, as well as ethical, social internal controls, procedures and systems of Standards 1300) found DBIA to be “generally and environmental matters. It also considers the Group, which in my opinion, would affect compliant” with the IIA Standards, the highest reports produced by external assurance the fairness of presentation of such reporting, rating on the degree of conformity scale. providers. These include audit coverage by and therefore financial decisions based Diamond Security, Aon Risk Management, thereon. It must be noted that the extent to Société Générale de Surveillance (SGS), which sales in 2009 will be affected as a result Deloitte & Touche and others. of the global economic crisis and recession is not yet known. Mitigating responses include restructuring plans and steps to ensure access to ongoing funding of operations. I share management’s view that the Group has sufficient resources to remain in business for the foreseeable future.” 98 De Beers Family of Companies Report to Society 2008 Governance and assurance Best Practice Principles Note on Kimberley Implementation of the In 2008 the scope of DBIA’s review of the Process compliance Anti-Money Laundering Policy Best Practice Principles (BPP) Assurance The Kimberley Process is a joint government, In 2006, De Beers developed and Programme was focused on ensuring that diamond industry and civil society initiative communicated a policy on Anti-Money the programme continued to be supported that requires participants to certify diamond Laundering and Combating the Financing of by good governance. The scope also shipments are conflict free. Compliance with Terrorism. The policy reflects the deep-seated provided for detailed, on-site verification the Kimberley Process is a legal requirement commitment of the Family of Companies to reviews of 20 BPP workbooks to supplement for participating countries. maintaining the continued confidence of its the review work conducted by SGS. The stakeholders and the integrity of its product. specific objective of the reviews was to verify A review of fact-finding reports, issued by responses within the BPP workbooks. No independent auditors, confirms that relevant DBIA’s 2008 review of the implementation and material breaches were identified during such business units comply with the requirement progress of the policy found that all business reviews and all improvement opportunities for De Beers to have its compliance with the units, applicable group functions, and shared have been agreed with management. Kimberley Process externally assessed. services have implemented the policy. The scope of the 2009 review, which is These reviews sought to assess Good progress has been made on the currently in progress, will provide for a De Beers compliance with respect to introduction of the required background desktop review to ensure that due diligence the Kimberley Process Certification checks on customers and suppliers. has been applied in the completion of all Scheme on the international trade in rough De Beers UK and De Beers Marine Namibia BPP workbooks submitted to SGS. It will diamonds, in accordance with European are implementing processes to further also continue to include the verification of Council Regulation (EC) No 1574/2005. enhance these checks. All staff affected by submitted workbooks. The assessments related to the period the policy have received relevant training. commencing 1 January 2008, and ending 31 DBCM’s Voorspoed mine has recently been Assurance Programme December 2008.

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