Information and control instruments

The Board of Directors is kept regularly informed about all important matters relating to the business activities of the Lindt & Sprüngli Group. The CEO and the CFO, as well as other members of the Group Management, as required, attend meetings of the Board of Directors and report on the ongoing course of business, important projects, and events. Extraordinary occurrences are immediately brought to the attention of the Chair of the Board of Directors. To obtain a direct picture of local market situations, the Board of Directors regularly visits country subsidiaries and meets with local business management.

The whole Board of Directors is kept informed in writing on a regular basis through an extensive and complete Management Information System (MIS) covering profit and loss, statement balance sheet, cash flow, investments, and personnel of the Lindt & Sprüngli Group and the individual subsidiaries. The information is provided on both a historical basis and as a year-end forecast.

Furthermore, members of the Board of Directors receive, on an annual basis, a detailed overall budget, together with a five-year medium-term plan with forecasts for the future development of individual subsidiaries and the consolidated group of companies, covering profit and loss, statement balance sheet, cash flow, investments, and personnel. In addition, the Board of Directors receives an annually updated Group-wide analysis of strategic, operational, legal/regulatory and financial risks – including assessments and actions taken to limit risks and responsibilities.

In order to assess the Lindt & Sprüngli Group risk parameters, the Audit Committee also receives a quarterly report on securities and cash investments, currencies, raw material procurement, and liquidity (risk control reporting). Members of the Group Management regularly attend Audit Committee meetings.

The Lindt & Sprüngli Group maintains the Lindt internal control system (LICS), which oversees the internal financial control system, management information and risk management reporting of the Group.

As part of the Lindt internal control system, the Group determines financial controls for the subsidiaries, which are tailored by the subsidiaries to local circumstances and risks. The existence and effectiveness of these controls are self-assessed annually by the subsidiaries. The results of these annual assessments are supervised centrally by the Group. Based on the observed results, a report regarding the financial internal control processes in the various corporate functions of the subsidiaries (including IT, Procurement, Production, Sales, Salary Payments, Treasury, HR, Legal, IP and Compliance and Financial Reporting) is submitted to the Audit Committee annually. Supervised by the Group, subsidiaries then develop measures to react to control weaknesses and deficiencies.

Internal Audit is another cornerstone of Lindt & Sprüngli’s internal control environment. As an independent, objective assurance and consulting activity designed to add value and improve the organization’s operations, Internal Audit supports management in monitoring compliance with relevant laws, regulations and internal policies. The Internal Audit department maintains a direct reporting line to the Audit Committee.

The statutory auditor of the Lindt & Sprüngli Group, PricewaterhouseCoopers AG, acts as an additional control instrument by, inter alia, testing the existence and adequacy of the internal control system; i.e. the LICS. In the course of the annual audit, the Audit Committee may also charge the statutory auditor with special assignments that go above and beyond legal and statutory requirements.

Lindt & Sprüngli is committed to conducting its business with fairness and integrity and to respecting laws and the values of the Lindt & Sprüngli Group. Similar behaviour is expected from all third parties, such as suppliers, contractors, and subcontractors, with which the Lindt & Sprüngli Group engages. These obligations and expectations are set out in the Lindt & Sprüngli Code of Conduct and in important policies such as the Human Rights Policy and the Speak Up Policy. Under the Speak Up Policy, Lindt & Sprüngli operates a Speak Up Line that enables employees and workers of Lindt & Sprüngli companies, and also companies, suppliers, and business partners, whether openly or anonymously, to report incidents or circumstances that could constitute a violation or possible violation of the Code of Conduct, Lindt & Sprüngli policies, laws, or other regulations. This includes health and safety risks, harassment and discrimination in the workplace, and environmental concerns. In the event of critical concerns, these are reported to the Board of Directors.