Tesco 2013 Annual Report Download - page 44

40 Tesco PLC Annual Report and Financial Statements 2013
Corporate governance continued
Principal risks Key controls and mitigating factors
Product safety
Failures could damage customer trust and confidence, impacting our
customer base and therefore financial results
• Group Product Policy adopted, implemented and monitored across
the business by our technical teams
• Controls in place around key risks including product integrity;
approval and management of supplier sites; standards in store and
distribution centres; competency of our people; management of
crises, emerging issues and changes in regulatory standards
• Detailed, established procedures, operating globally, to ensure
product integrity
• Product surveillance programmes in place including our new DNA
traceability programme
• Regular reporting to local and Group Compliance Committees
on management of risks associated with products, suppliers
and operations
IT systems and infrastructure
Any significant failure in the IT processes of our retail operations would
impact our ability to trade. Failure to invest appropriately in IT could
increase our vulnerability to attack, constrain the growth of the
business and fail to safeguard personnel, supplier or customer data
• IT strategy is approved and reviewed by the Executive Committee
to ensure that investments in IT systems and innovations improve
business efficiency and customers’ shopping experience
• Group Technology Committee monitors controls to maintain
integrity and efficiency of IT infrastructure and data
• Information Security Committee meets regularly to review the
development and implementation of policies
• Rigorous governance processes for new and modified systems
implementations
• Processes to deal with significant IT security incidents
• Sharing of systems across international operations to ensure
consistency of delivery
People
Failure to attract, retain, develop and motivate the best people with
the right capabilities at all levels could limit our ability to succeed
• People Matters Group (‘PMG’) regularly meets to review and
monitor all people policies, procedures and risks
• Clear processes to understand and respond to employees’ needs
through our PMG, colleague surveys, regular performance reviews,
involvement of trade unions in relevant markets and regular
communication of business developments
• Talent planning and people development is a key objective for each
member of the Executive Committee
• Significant investment in training, development and incentives,
including Executive Committee Talent Cycle, Talent Planning,
Leadership Development and succession planning for future needs
of the business
• Pay, pension and share plan arrangements help us to attract and
retain good people
Group Treasury
Failure to ensure the availability of funds to meet the needs of the
business or to manage interest or exchange rate fluctuations could
limit our ability to trade profitably. Further detail on the management
of financial risks can be found in the ‘Financial risks review’ table on
page 42 and in Note 22 of the financial statements
• An annual Finance Plan and General Board Authority set out
the controls and authority limits for all Treasury matters
• The Balance Sheet Committee meets regularly to monitor
Treasury risks and manage the liquidity needs of the business
• An annual Treasury Review is carried out by the Executive
Committee
• Comprehensive Treasury Policies set out processes and controls
around the use of financial instruments, hedging, liquidity, bank
account management and the segregation of duties required
between our back and front offices