Holiday Inn 2009 Annual Report Download - page 31

Business review 29
Risk management
Corporate risk management
Culture, capability, process and framework
The management of major risks to IHG is represented below:
IHG has an established global risk management process and
framework embedded in all operations teams and functions. Our
goal is to develop a robust, responsive, resilient process, and a
successful, respected, responsible business over the long term.
In doing so we support the main functions of the Board in:
• identifying and managing risk in alignment with our strategic
objectives and the long-term value drivers in the business; and
• enabling management to demonstrate a responsible and
proactive, embedded approach to risk management.
The development of IHG’s risk management culture and capability
is a collaborative effort led by the Company Secretary. Our vision
is to foster a culture that becomes instinctive, curious, alert,
responsive, consistent and accountable.
Risk management activity permeates the whole Group but, most
importantly, as part of the strategic review process between the
Chief Executive and individual Executive Committee members,
major risks are identified and considered.
Working together to mitigate corporate risk
To enhance the management and visibility of corporate risks, IHG
has set up a Global Risk Working Group with the following primary
objectives to:
• foster improved risk management across IHG’s leadership
teams and improved assurance to the IHG Board;
• create a better understanding of key risks and controls, in
particular, cross-functional risks, which may prevent delivery
of IHG’s strategy;
• highlight risks not being adequately addressed;
• encourage and facilitate sharing of best practice across
the organisation;
• reduce the total cost of risk by sponsoring continuous risk
improvement; and
• monitor and periodically examine risk culture and governance.
In addition, the strategy, risk and internal audit teams work
together to align activities to ensure that the discipline of corporate
risk management is relevant, valuable and efficiently applied
across the business.
Strategy:
The Global Strategy function provides a strong link to value creation
opportunities and asset protection requirements of the business
and gives access to the core business agenda.
Risk Management:
The Global Risk Management function focuses on driving action
to support the strategy and protect assets by building a risk-aware
and proactive culture and capability amongst management,
focusing on risks prioritised by the business leaders.
Assurance:
Global Internal Audit provides assurance, identifies vulnerabilities
and presents opportunities for new, or improvements to existing,
controls that business leaders might not have identified
for themselves.
Risk identification and crisis response workshops are run with
the senior leadership teams to identify, prioritise and agree
outline plans to mitigate risks. The output is a risk register
(including action plans) with risks assigned to each member
of the Executive Committee.
The Executive Committee uses the findings to identify the major
areas of risk for the Group and to assign accountability for cross-
functional leadership between them. The Executive Committee
prioritises and co-ordinates efforts to optimise the management
of major risks to IHG.
RISK
MANAGEMENT ASSURANCE
STRATEGY
Governance
GROWTH
PROFIT
CONTINUITY
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REVIEW
RISK
PROCESS
IDENTIFY &
PRIORITISE
RISK
REPORT ON
GOVERNANCE
AND CULTURE
QUANTIFY
RISKS
IMPLEMENT
AND TEST
DEVELOP
RESPONSE
PLAN AND
SOLUTIONS
BUSINESS REVIEW