Carphone Warehouse 2016 Annual Report Download - page 48

Corporate Governance Report
46
Risk appetite
Dixons Carphone faces a broad range of risks reflecting the
business environment in which it operates and the risks arising
from the Dixons Carphone business environment and
operating model can be significant. Successful financial
performance for the business is achieved by managing these
risks through intelligent decision-making and an effective
control environment that details the processes and controls
required to mitigate risk.
Dixons Carphone’s general risk appetite is a balanced one
that allows taking measured risk as it pursues its strategic
objectives whilst aiming to manage and minimise risk in its
operations. Dixons Carphone recognises that it is not possible
or necessarily desirable to eliminate all of the risks inherent in
its activities. Acceptance of some risk is often necessary to
foster innovation and growth within its business practices.
Internal audit
The Group has an internal audit department which conducts
reviews of selected business processes each year. The internal
audit programme for 2015/16 consisted of reviews across a
range of areas documented and prioritised in the Group’s
internal audit plan, which was prepared taking into account the
principal risks across the Group and approved with input from
management and the Audit Committee. The plan is designed
each year to test the robustness of mitigating controls and
ensure procedures are designed and operating effectively. Part
of the approval process of this plan involves the Audit
Committee’s consideration of alignment of the plan with the
principal risks faced by the Group.
The Audit Committee Chairman receives and reviews all
reports from the internal audit department detailing its material
findings from testing performed and any recommendations for
improvement. The Audit Committee receives a summary of
these reports at each meeting, with the full reports available to
all members on request. The internal audit team track and
report on the progress and implementation of action plans
agreed with management, and follow-up procedures are
performed once these actions and additional controls have
been put in place to ensure that the new controls and / or
procedures have been implemented effectively.
The Audit Committee considered the effectiveness of the
internal audit department through holding discussions with
management, considering the quality of reports submitted, the
timeliness of the clearance of action points and the perceived
impartiality of the audit team itself. The Committee concluded
that the internal audit department has in all respects been
effective during the period under review.
Authorisation of conflicts of interest
The Company has procedures in place to identify, authorise
and manage conflicts of interest, and these procedures have
operated effectively. Potential conflicts are approved by the
Board, or by two independent directors if authorisation is
needed quickly, and then reported to the main Board at its
next meeting. A register of directors’ conflicts is maintained.
Communication with investors
The Board supports the initiatives set out in the Code and the
Stewardship Code and actively encourages engagement with
major institutional investors and other stakeholders. It believes
that it is important to explain business developments and
financial results to the Company’s shareholders and to
understand shareholder concerns. The principal communication
media used to impart information to shareholders are news
releases (including results announcements), investor
presentations and company publications.
The Group Chief Executive has principal responsibility for
investor relations. He is supported by a dedicated investor
relations department that, amongst other matters, organises
presentations for analysts and institutional investors. There
is a full programme of regular dialogue with major institutional
shareholders and potential shareholders as well as sell-side
analysts. In March 2016, a capital markets day was held and
attended by analysts and institutional investors that focused on
future plans for our consumer services offerings to be trialled in
summer 2016. In all such dialogue, care is taken to ensure that
no price-sensitive information is released.
The Chairman ensures that the Board receives updates on
investor relations matters at each Board meeting. The Board
also receives periodic reports on investors’ views of the
performance of the Company. The Chairman and non-
executive directors are available to meet with major
shareholders if such meetings are required, and the Chairman
of the Remuneration Committee communicates with major
shareholders on matters of remuneration and has conducted
various remuneration consultations. More information on the
remuneration consultations can be found in the Remuneration
Report on pages 57 to 81.
The Company is committed to fostering effective
communication with all of its members, be they institutional
investors, private or employee shareholders. The Company
communicates formally to its members when its full year and
half year results are published. These results are posted on the
investor relations part of the corporate website, as are other
external announcements and press releases.
The annual general meeting is an important medium by which
the Company communicates with shareholders, at which an
account of the progress of the business over the last year,
along with a review of current issues facing the business is
given. Shareholders are encouraged to ask questions and
the directors, including the Chairmen of the Board committees,
are in attendance to answer them. In accordance with the
Code, formal notification of the Company’s annual general
meeting is sent to shareholders at least 20 working days in
advance of the meeting.
Further financial and business information is available on the
Group’s corporate website, www.dixonscarphone.com.
Sir Charles Dunstone
Chairman
28 June 2016
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Corporate Governance
Dixons Carphone plc Annual Report and Accounts 2015/16