| Risk category |
Risk management and mitigation |
| Contract pricing and operational resources |
- Group Board involvement in all major contracts
- Aligned with core competencies and financial targets
- Rigorous pricing and risk assessment, separate from sales process
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- Secure appropriate pricing and contract terms to ensure fair risk/reward profile
- Detailed, tailored transition process to ensure continuity of service and retention of employees
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| Acquisitions - quality and appropriate pricing |
- Aligned with core competencies/financial targets
- Rigorous risk based due diligence process
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- Fit with strategy and pricing is subject to consideration and approval bt the Group Board
- Clear transition process to ensure adoption of Group policies and procedures
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| Operational risk |
- Escalated via the MOB process and Risk Committees to Divisional Executive and Group Boards as appropriate
- Processes and appropriate multiple operating perfomance indicators in place across all businesses/contracts
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- Processes and reports in place to highlight, in particular, business processes, employees, health & safety and environment issues.
- Supporting software tools are being rolled out across our business
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| Fraud issues |
- Mitigating policies and procedures are disseminated by the Group Risk and Business Assurance function in conjunction with Group Compliance
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- The Group has invested in a tailored fraud awareness training package that has been rolled out across all business units to enforce fraud management.
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| Regulatory and legislative impacts |
- Monitored by Group Compliance function reporting directly to the Group Finance Director and independently to the Audit Committee
- Review and communications process for regulatory and legislative change that impacts Group-wide
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- Seperate challenge and review process for business operating in a regulatory environment. These businesses have comprehensive processes embedded into their business functions to address specific regulatory requirements.
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| Financial control |
- Capital expenditure is subject to rigorous budgetary controls and spending above specified levels requires Group sign off
- Financial performance of each business unit is monitored each month and actual progress against plan is challenged by Divisional Executive Board
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- Treasury management - the Group's principal financial instruments for fundraising are bonds, unsecured loan notes, finance leases and overdrafts. The Group has various other financial instruments such as trade creditors and debtors that arise directly from its operations. Where appropriate, the Group may also use derivatives to hedge its exposure to fluctuations in interest rate and foreign exchange rates. It is the Group’s policy that no trading in financial instruments will be undertaken.
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| Attracting and retaining employees |
- Investment in training and development
- Competitive, appropriate incentive schemes
- Succession planning is a key element of the MOB process
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- Continual development of our robust screening and reference process for all employees.
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| Maintaining reputation |
- Robust process for handling and escalating enquiries/complaints from all stakeholders at both a business/contract and Group level – primarily clients, media, public and suppliers
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- Centralised proactive and reactive PR team to promote Group and separate businesses and to manage communications regarding issues.
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| Appropriate supplier relationships |
- Active supplier engagement to assess and align suppliers with Group values and processes
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- Supplier registration and approvals processes are in place. A new Supplier Development Programme for key strategic suppliers is being developed and implemented during 2007.
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