7. Managing the targeting and pursuit of acquisition opportunities /
Risk description /
- –
- Acquisitions need to be value creating and support the Group strategy.
Potential risk impact /
- –
- Lost profit
- –
- Management distraction.
Risk management strategy /
- –
- Targeting acquisitions which are aligned with the Group’s strategy and culture, as well as ensuring they meet specific financial criteria.
Risk mitigation actions /
- –
- We maintain a pipeline of potential targets across a diverse range of geographies and product offerings
- –
- All acquisitions require approval by an internal acquisitions committee chaired by the Group CEO. Larger acquisitions have to be agreed by the Group Board
- –
- We aim to limit the initial consideration and pay the consideration over time through earn-out payment structures
- –
- There is a Group M&A team in place to support local management in sourcing and acquiring targets
- –
- Acquisitions need to promise to deliver a rate of return of at least 30% above our weighted average cost of capital and need to achieve earnings enhancement in the first full year of ownership.
8. Ensuring acquisitions are fully integrated /
Risk description /
- –
- Unsuccessful integration of acquired companies.
Potential risk impact /
- –
- Lost profit
- –
- Management distraction.
Risk management strategy /
- –
- Post acquisition integration plans in place for all newly acquired entities to ensure they are properly integrated into the Group.
Risk mitigation actions /
- –
- We track and report on the integration process tracked at three months and one year, providing additional assistance to those entities requiring more support
- –
- We aim to re-brand acquired businesses in the first full year of ownership.
9. Managing the security of data /
Risk description /
- –
- Unauthorised access to or inappropriate use of client, employee or other confidential data.
Potential risk impact /
- –
- Lost profit
- –
- Reputational damage.
Risk management strategy /
- –
- Ensuring robust IT and financial reporting systems are in place, in line with best practice data security and compliance regulations, and based on strict internal policies and procedures.
Risk mitigation actions /
- –
- External access to information is protected by the IT security framework which is regularly assessed through vulnerability testing and IT security audits
- –
- We insist on confidentiality clauses in employee and supplier contracts
- –
- We are currently obtaining further validation of the quality of our information security by undertaking ISO27001 certification for our key businesses.
10. Ensuring legal and regulatory compliance /
Risk description /
- –
- The Group may be unprepared for legislative and regulatory changes.
Potential risk impact /
- –
- Lost profit
- –
- Loss of license to operate and/or market
- –
- Damage to management reputation and credibility.
Risk management strategy /
- –
- Ensuring compliance with a range of legal and contractual requirements around the world.
Risk mitigation actions /
- –
- Group Legal team continually monitors changes in regulation with a view to changing group policies and communicating the changes before they come into force. This team includes a specialist compliance lawyer
- –
- Online compliance training packages have been developed to supplement face-to-face training
- –
- We have established a regulatory intranet which is utilised as a tracking tool for new and updated regulation and an internal newsletter which updates employees on developments in the area of compliance.
11. Managing corporate responsibility risks /
Risk description /
- –
- The Group is unable to respond to the changing regulatory environment around environmental and community responsibility, unable to meet its clients’ and employees’ sustainability requirements or unable to fulfil stakeholder expectations.
Potential risk impact /
- –
- Lost profit, clients and potential reputational damage.
Risk management strategy /
- –
- Integrating Corporate Responsibility considerations in Group policies and procedures and developing ambitious targets and programmes to turn Corporate Responsibility risks into opportunities.
Risk mitigation actions /
- –
- Appointment of a central Corporate Responsibility department.
- –
- Development of a network of Corporate Responsibility champions in each market to ensure local compliance through standardised reporting, to develop local action plans to achieve our targets, and to raise awareness amongst our stakeholders.
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