Risk and Risk Management

The Group is exposed to a variety of risks that can adversely affect business and financial performance, or potentially damage our reputation.

These risks may be industry wide or more specific to the Group. The Board recognises that creating shareholder returns is the reward for accepting a level of risk. The effective management of risk is therefore critical in supporting the delivery of the Group’s strategic objectives.

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Risk management framework

 

The Group has a well-established governance structure with appropriate internal control and risk management systems. Our approach is centred on the accepted ‘three lines of defence’ model, with ultimate oversight from the Board.

Defence

Responsibility

Actions
Oversight Board
  • Sets strategic objectives
  • Determines overall risk culture and appetite
  • Establishes organisational structure with defined lines of responsibility, delegated authorities and clear operating processes
  • Ultimate oversight of internal control and risk management systems
Third line Group Audit
  • Provides reasonable assurance that systems of risk management, internal control and governance are effective
Second line Group Executive Committee Group functions including Risk
  • Support Divisions with ‘first line’ responsibilities
  • Coordinate and report on Group-level risks
  • Build risk capability and understanding
First line Divisional Executive Committees Divisional management
  • Identify, assess and report key risks
  • Regularly review and update divisional risk registers
  • Assign risk ‘owners’
  • Implement risk mitigation plans

Many risk controls are embedded and evidenced in the Group’s day-to-day management activities, including:

  • Detailed KPI tracking in monthly divisional executive reports
  • Well-established bid evaluation controls and;
  • Robust due diligence on acquisitions

Prioritising and reporting risks

 

Looking forward, the Group will focus on the following key areas of risk:

 

 

 

Principal risks and uncertainties