URS Verification Ltd (URSVL) has been commissioned by Smiths Group (Smiths) to provide independent assurance of its Corporate responsibility report 2006.
Responsibilities of Directors and Assurors
The information contained in Smiths Corporate responsibility report 2006 is the sole responsibility of the Directors of the company. This assurance statement represents the independent opinion of URSVL. The URSVL project team members have not been involved in the development of the report or associated systems. URSVL receives less than 5% of its revenue from Smiths.
URSVL has carried out its services by checking samples of information and documents that have been made available to URSVL by Smiths. Accordingly, URSVL has not checked or reviewed all of Smith's information and documents. This assurance statement is not intended to be used as advice or as the basis for any decisions, including, without limitation, financial or investment decisions.
Method
URSVL has performed this assurance process following the principles of the AA1000 assurance standard. URSVL auditors also apply the general principles of auditing and audit procedures as contained within international standard ISO 19011. The assurance process included:
- Interviews with twelve key Smiths personnel covering a range of business units and corporate responsibility related functions; and
- Visits to seven sites across the four divisions of Smiths located in UK, USA, Canada, Mexico and India.
The case studies presented in the report fall outside the scope of the verification process.
Opinion
Although Smiths has been reporting on environmental, health and safety management and performance for a number of years this is Smiths first annual corporate responsibility report. As acknowledged by Smiths, there is need for further work defining additional programmes under the corporate responsibility umbrella.
Smiths Code of Corporate Responsibility and Business Ethics has been rolled out across the business for a couple of years and there is a good level of awareness of the Code.
Materiality
Has Smiths applied an effective process to identify material risks?
Smiths has a business risk process that considers both financial and non-financial risks and is aggregated at a divisional and Group level. The process has been refined during the past year to include challenge by the non-executive directors on the content of the Group level risk matrix.
A variety of non-financial risks were identified during our interview process; these were generally consistent with those contained within the Group risk register. Increased dissemination of the outcomes from the business risk process could provide additional benefits to reinforce the existing risk management practices.
Completeness
Does the report provide a complete, fair and balanced representation of material issues?
The activities and programmes discussed in the report are fairly represented, and some difficult performance issues have been openly addressed. However, further discussion of the key environmental and social impacts of Smiths operations and stakeholder engagement would increase the clarity and balance of sections within this report. We look forward to Smiths providing greater coverage of impacts and performance in other areas such as marketplace including customer and supplier interactions, social impacts of product use and business change to improve the completeness of future reports.
Smiths has an established environmental, health and safety collection and collation process. Some errors have been identified during the assurance process, the majority of which relate to one off human error. None of these would be considered material when aggregated up to a divisional or corporate level. Furthermore, all the identified errors have been corrected within the data set contained in this report.
Responsiveness
Does Smiths engage actively on key issues with appropriate stakeholders?
It is clear that there is engagement with various stakeholders at a number of levels within the organisation. There is also evidence that Smiths has changed its business practices to reflect the needs of its stakeholders. However, based on the scope of this assurance process and the devolved nature of Smiths it is not possible to comment on the overall quality and effectiveness of these processes.
Recommendations
We have provided recommendations for further development of the group's corporate responsibility strategy and programmes to Smiths management.
For and on behalf of URS Verification Ltd
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