Introduction: In order to strengthen the internal risk management and control of the enterprise, combined with the practice of Juhua Group’s risk management and control system construction, this article starts from the group governance structure, comprehensive budget management, business process control, information system construction, internal audit and In terms of financial control and other aspects, the group management and control "1+3+3" model is proposed to effectively solve the problem of enterprise groups managing and controlling their subordinate member companies. Enterprise Group Risk Management and Control Model
For a long time, the issue of how to effectively manage and control subordinate member companies has often troubled the management of the enterprise group headquarters. What kind of management and control model an enterprise group adopts cannot copy the management and control model of a successful enterprise. Instead, it should choose a model suitable for the development of the enterprise based on its own characteristics. The 1+3+3 model of group management and control being implemented by Juhua Group mainly draws on the internal control management experience of Sinochem Group and the thoughts of experts such as Bai Waggang on group governance and control, and is proposed based on the future management reform requirements of the enterprise. The group management and control model is to establish a scientific budget and performance evaluation system, improve and strengthen the three major risk control links (the business risk control link with mutual checks and balances between the front, middle and back offices, the information system control link and the relatively independent internal audit link) to achieve the three unifications of financial management (the unification of accounting management, fund management and financial management personnel management).
1. Establish a scientific budget and performance evaluation system
(1) Innovate budget preparation methods to achieve effective connection between financial budget and strategic planning
The group company revise the strategic plan on a rolling basis every year, and refine the specific measures in the first year of the plan into an operational annual business plan, and then digitize it. On this basis, combined with factor analysis, a financial budget is formed. The budget preparation adopts a top-down, bottom-up, and top-down organizational process, and the group company's budget committee and strategic planning committee jointly conduct dialogue and questioning on the strategic planning, business plans and financial budgets of each operating unit, and finally determine each Business unit budget and sign a performance appraisal responsibility letter.
(2) Strengthen the process monitoring of the budget to ensure the realization of budget goals
1. Establish a real-time budget tracking system
Use the ERP information system to extract data in real time They will be processed and reflected, and relevant functional departments will regularly compare budgets, track the operating conditions of key units, and conduct daily real-time monitoring.
2. Establish a regular budget inquiry and correction system
The financial department should prepare a monthly operational report every month, analyze the reasons for the differences in the implementation of the business plan and the financial budget, find out existing problems, and report them to the department in a timely manner. Company leadership reports; performance evaluation meetings are held every quarter, attended by all senior executives of the company and leaders of each business unit, to comment on the performance of each unit, draw attention to problems, and request improvements; hold meetings for all key positions in the half-year and full-year periods for evaluation, and summarize the half-year meetings. Work for half a year, and at the same time put forward the requirements for rectification in the second half of the year, make formal evaluations throughout the year, including scores, rewards, etc., and issue a performance evaluation report. Through continuous process management and analysis and evaluation, operators are encouraged to consciously pursue high performance and effectively control business risks.
3. Strict extra-budgetary approval procedures
Strictly review applications for additional resource budgets, focusing on funds. Budget management is serious. Each unit has no right to make budget adjustments and must go through the group Company approval.
(3) Performance appraisal must reflect science and rationality
Whether the comprehensive budget can be effectively implemented, performance evaluation plays a key role. Generally speaking, performance appraisal cannot make a big pot of rice. Treating by doing nothing should not flog fast cows and dampen the enthusiasm of advanced people. First, by formulating a balanced scorecard and conducting assessments step by step from top to bottom, a pyramid-style performance management responsibility chain is formed; second, the performance results are objectively evaluated and used as a basis for the adjustment of relevant resources. Such as adjusting the organization, cleaning up and adjusting enterprises or business units with poor performance; adjusting personnel allocation, "promoting the capable and demoting the mediocre"; adjusting operators according to the performance; emphasizing salary allocation and allocating salary according to performance, etc.
Through performance evaluation, business operators are encouraged to keep a clear head at all times, check gaps and reasons, make improvements in subsequent operations, and pursue healthy, rapid, and sustainable growth in performance.
2. Improve and strengthen the three major risk control links
(1) Business risk control links with mutual checks and balances between the front, middle and back offices
1. Adjustment, Optimize the organizational structure and form an organizational guarantee for group management and control
The organizational structure mainly includes governance structure and internal institutional settings. The governance structure mainly needs to clarify the responsibilities, authority, qualifications, rules of procedure and working procedures of the board of directors, board of supervisors and managers at all levels to ensure that decision-making, execution and supervision are separated from each other to form checks and balances. It is necessary to establish a regular duty reporting and major event reporting system for the appointed directors and supervisors of subsidiaries, so that the group company can perform the investor's responsibilities and safeguard the investor's rights and interests in a legal and effective manner. It is recommended that qualified enterprise groups set up expatriate supervisory groups, with each group supervising 3-4 branches and subsidiaries, strengthening supervision of daily operations and management of branches and subsidiaries, standardizing corporate management, correcting illegal operations, and preventing asset losses, etc.
The internal organizational structure should be set up reasonably in accordance with the principles of science, simplicity, efficiency, transparency, and checks and balances, comprehensively considering factors such as development strategies and management requirements, and clarifying the responsibilities and authority of each organization to avoid overlapping, missing or overlapping functions. Powers and responsibilities are too centralized, forming a working mechanism in which each person performs his own duties, takes responsibility, restricts each other, and coordinates with each other.
2. Optimize business process control and form a mutual checks and balances mechanism
The risk management and control system exists in all aspects of the daily management of the enterprise group, and the business process is one of the important factors supporting the enterprise risk management and control system. First, it can ensure the normal operation of the enterprise's risk management and control system, provide reliable support for the enterprise's daily production and operations, and is the basic way to solve enterprise risk management and control problems. The business process must have the following functions: First, the decision-making function. The business process must outline the business direction of the enterprise, provide a reliable basis for the enterprise management to make decisions, be able to effectively distinguish the primary and secondary relationships of the enterprise's business, and provide prerequisites for the enterprise to control key points; It is the coordination function. The business process must clearly express the mutual transmission relationship between departments and positions. In a sense, it is an indirect tool to clarify department responsibilities and job responsibilities; the third is the business operation guidance function, and the business process content It should be detailed and clear, that is, it clearly clarifies what the company's business personnel should and should not do; fourth, it is the function of separation of job responsibilities. The business process must solve the important content of incompatible separation of job responsibilities in the risk management and control system; The fifth is the performance appraisal measurement function. Business processes can provide measurement standards for the design of performance appraisal indicators for specific positions.
Enterprise groups should focus on procurement, sales, investment, asset management and other business contents, analyze possible risk links in each business process, optimize the work processes and control measures of each link, and form a mechanism of mutual checks and balances , to prevent and resolve important risks in various businesses.
3. Improve various internal management systems and strengthen implementation
Combined with the requirements of risk management and control system construction, formulate rules and regulations related to the group’s internal control, improve customer credit management, overdue response Internal control systems such as collection management, futures hedging management, centralized fund management, financial budget management, performance evaluation and salary management, risk management, investment management, inventory management, auditing and auditing, etc., to standardize the management restraint mechanism. At the same time, the group company must strengthen monitoring through auditing, performance evaluation and other means to ensure the implementation of the internal control system and maintain the dignity and authority of the system. In addition, in an environment where information is constantly changing, we must pay close attention to the effects and feedback of system implementation, constantly review the rationality of the system, and make timely revisions and improvements to maintain the advanced nature of the system.
(2) Information system control link
Informatization is an indispensable means for group management and control. Group management and control focuses on two points. First, process optimization. The quality of enterprise management mainly depends on whether the process is scientific and reasonable. Process optimization itself is a man-made thing. To solidify them, written systems alone are not enough. Information systems are a good means of solidifying processes and improving process efficiency. Second, risk management and control. There are many risks in business, including capital, financial, personnel risks, etc.
Information systems do not control risks for people, but provide timely and accurate information for risk control. Only with the information system can we realize the institutionalization of management, the process of system and the informatization of processes, and truly realize the unified management of the front office (business), middle office (risk management) and back office (finance).
(3) Relatively independent internal audit link
Audit audit must be independent of the audited unit, and also independent of other functional departments of the group company and the company leaders in charge of the audited unit, only Responsible to the board of directors of the group company. While strengthening the independence of internal audit, the audit method is mainly risk-oriented audit, focusing on supervising and inspecting the implementation of internal control and promoting system construction; the audit object is centered on the internal control system, and the audit of key enterprises, key businesses and key issues is strengthened. Check the implementation of the system by personnel in key positions; the audit scope requires multiple aspects of internal control, focusing on business, attaching importance to system construction, assessing risks, and promoting management.
3. Realize the three unifications of financial management
(1) Unification of accounting management
Only through accurate financial accounting can an enterprise do well. Only through accounting can we get these data. In order to ensure the authenticity, completeness and timeliness of accounting information and provide accurate basic information for group company decision-making, the accounting subject system and accounting standards must be unified within the group, and unified financial accounting management standards must be implemented.
(2) Unified fund management
Implement centralized fund management, on the one hand, centralize financing rights, strengthen the approval of external financing and guarantees of branches and subsidiaries, and prevent arbitrary loans and guarantees. More importantly, through the concentration of funds, the monitoring of the business operations of each unit is strengthened; on the other hand, the resource allocation function of the group company is highlighted. The group company approves the capital budget of each unit in accordance with the input-output principle and the income-risk matching principle, and tracks the funds. Flow and occupancy status, and strictly review the allocation of funds beyond the budget, so that the allocation of funds will be tilted towards enterprises with strong core operating capabilities, high input-output levels, and high growth potential.
(3) Unification of financial management personnel
Assign financial managers to branches and subsidiaries to achieve daily financial monitoring. The appointed financial director's personnel relations, salary relations, welfare benefits, etc. are all in the group company, cutting off the interest relationship with the business unit where he works and reducing the professional ethics risks of financial personnel. The appointed financial director should organize and monitor the daily financial and accounting activities of branches and subsidiaries, participate in major operating decisions of branches and subsidiaries, and implement major decisions of the group company on structural adjustment, resource allocation, major investments, and technological development. Supervise and control the implementation of various budgets of branches and subsidiaries. Review the financial reports of branches and subsidiaries, be responsible for the business management of the financial accounting personnel of branches and subsidiaries, and regularly report the asset operation and financial status of branches and subsidiaries to the group company. The group company appoints a financial supervisor to supervise and control the major financial accounting activities and all financial revenue and expenditure processes of branches and subsidiaries, which not only enables the group company's overall operating policies and goals to be fully implemented and realized in branches and subsidiaries, but also It can also supervise the authenticity and objectivity of financial accounting information of branches and subsidiaries, and effectively protect the rights and interests of the group company.