Experian 2012 Annual Report Download - page 26

24 Experian Annual Report 2012 Business overview
Risks and uncertainties
Experian has a risk management framework which provides a structured and
consistent process for identifying, assessing and responding to risks in relation
to our strategy and business objectives including our strategic focus on data
and analytics, driving profitable growth and optimising capital efficiency.
Risk management operates at all levels
throughout our organisation, across
geographies, business lines, and operational
support functions. The Board is ultimately
responsible for risk management, which
includes our risk governance structure and
maintaining an appropriate internal control
framework. Management’s responsibility
is to manage risk on behalf of the Board.
By reporting regularly to the Board and to
the Audit Committee, our internal audit and
global risk management functions provide
support to the Board in maintaining effective
risk management across the Group. The
corporate governance statement in this
report provides further detail on this process.
Risk management framework
Effective management of risk and
opportunity is essential to the delivery of
our objectives, achievement of sustainable
shareholder value and protection of our
reputation. Experian has an established
global risk management process which has
operated throughout the year ended
31 March 2012.
The framework enables our risks to be
identified, analysed, evaluated, controlled,
monitored and reported. In doing so the main
functions of the Board are supported by:
• identifying and managing risk in alignment
with our strategic objectives, risk appetite,
corporate responsibility strategy and the
long-term value drivers in the business; and
• enabling management to demonstrate
a responsible and proactive, embedded
approach to risk management.
• Defined and communicated business
principles and strategies
• Clear Group objectives, supported
by financial and non-financial key
performance indicators (KPIs)
• Standardised process to identify,
evaluate and manage significant risks
on an ongoing basis
• Control reviews and follow-ups
performed by management, internal
audit and third parties
• Budgetary controls and monthly
performance reviews, including
achievement of objectives and KPIs
• Regional risk management committees
with local oversight of risk management
processes
• Executive risk management
committee with global oversight of risk
management processes
• Regular reporting on risk to the Audit
Committee by senior management
• Regular risk updates to the Board
Key aspects of the Experian risk management framework
Identify
• Full risk review under taken at
least bi-annually by each
business and function
• Both financial and non-
financial risks recorded
in controlled risk registers
• Risk owners allocated to
assess and manage risk
Analyse
• Co ntrols analys ed for
adequacy and effectiveness
• Risk analysed for impact,
probability and the speed
with which a risk impacts the
organisation (known as
velocity) to determine net
exposure
Evaluate
• Risk exposur e reviewe d
and risks prioritised
• Risk evaluation documented
in controlled risk register
Respond
• Risk owner s identified
• Ac tion plans implem ented
to manage or respond to risk
subject to regular review
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Reporting
Reporting
Identify
• Full risk rev iew unde rt aken
at least bi-annually by each
business and function
• Both financial and non-
financial risks recorded
in controlled risk registers
• Risk owners allocated to
assess and manage risk
Analyse
• C ontrols analysed
for adequacy and
effectiveness
• Risk analysed for impact,
probability and the speed
with which a risk impacts
the organisation (known
as velocity) to determine
net exposure
Evaluate
• Risk exposure re viewed
against established limits
• Risk prioritised
• Risk evaluation
documented in controlled
risk register
Respond
• Action own ers identified
• Ac tion plans imple mented
to manage or respond
to risk subject to regular
review