EasyJet 2012 Annual Report Download - page 31

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Strategic
impact Risk description and potential impact Current mitigation
REPUTATIONAL RISKS
Major shareholder / investor relationship issues
easyJet has a major shareholder (easyGroup Holdings Limited)
controlling over 25% of ordinary shares. Shareholder activism could
adversely impact the reputation of the Company and cause a
distraction to management.
easyJet does not own its company name or branding which is
licensed from easyGroup IP Licensing. As for all brand licensees, the
easyJet brand could be impacted through actions of the easyGroup
or other easyGroup licensees.
We have a very active shareholder engagement
programme led by our Investor Relations team. We seek
to engage with easyGroup Holdings Limited on a regular
basis alongside all our other major shareholders as part
of that programme with a view to ensuring the Board
and management team are kept aware of the views
ofall shareholders.
A team of individuals from the Board and senior
management take responsibility for addressing issues
arising from the activist approach adopted by the major
shareholder. The objective is to address issues when they
arise as effectively as possible in order to minimise the
disruptive effect on day-to-day management of the
Company’s operation and to anticipate and plan for
potential future activism.
Ineffective or non-delivery of the business strategy
A number of key projects have been set up to deliver key elements
of the strategy. If these projects do not deliver the benefits and cost
savings planned we could fall short of our planned financial results.
Programme management office (PMO) and experienced
project teams have been set up to oversee delivery and
track the budget and benefits realisation of all projects.
Steering Group set up with key senior management on it to
ensure monitoring, challenge and key decisions are being
made at the appropriate level.
Information security
easyJet faces external and internal information security risks.
TheCompany receives most of its revenue through credit card
transactions and operates as an e-commerce business.
A security breach could result in a material adverse impact for the
business and reputational damage.
Systems are secured and monitored against unauthorised
access. This will receive continued focus.
Information security controls are being further enhanced in
key areas including third parties, governance, HR, physical
security and IT / technical.
The security of internal systems and easyJet.com are
reviewed quarterly through penetration testing.
Employee security sessions are run periodically to maintain
staff awareness.
Scanning software for fraudulent customer activity is
monitored and controlled by the Revenue Protection team.
Bribery Act
The Bribery Act came into force in July 2011. To date there are no
precedents set in respect of how this will be enforced with respect to
corporations. As with all companies, if we were found to be in breach
of the Act this could adversely affect us financially and reputationally.
easyJet has a strong ethical tone from the top .
Risks assessments have been completed and appropriate
actions taken where necessary.
General awareness training has been provided, with
additional targeted training given to higher risk groups.
New offerings add complexity to customer experience
easyJet has the ability to deliver value to the customer by ensuring
the end to end customer proposition continues to make travel easy.
There is a risk that as easyJet continues to grow we could add
additional complexity into our business model.
Rigorous change governance process in place.
The customer experience is at the heart of all changes
or new offerings considered by easyJet.
Performance and risk
easyJet plc
Annual report and accounts 2012 29