BT 2012 Annual Report Download - page 35

Strategy
32
Our risks
In common with all businesses, we are affected by a
number of risks and uncertainties which are influenced
by both internal and external factors, some of which
are not within our control. Many of our risks are similar
to those of comparable companies in terms of scale
and operation.
Principal risks and uncertainties
This section highlights principal risks and uncertainties affecting our
business but it is not intended to be an extensive analysis of all risk
and uncertainty affecting us. These risks have the potential to impact
our business, revenue, profits, assets, liquidity and capital resources
adversely. Our processes are designed to give reasonable, but cannot
give absolute, assurance that the risks significant to us are identified and
addressed. There may be risks which are unknown or which are presently
judged not to be significant but later prove to be significant.
Uncertainty in global economic and credit market conditions remains a
major challenge to businesses globally. This is particularly true in Europe
where there are concerns over government debt levels and possible
currency re-denomination risks. In common with many other businesses
we remain conscious of the adverse impact that unfavourable economic
and credit conditions may have on our business. This economic
uncertainty manifests itself in several of the risks we face, and we focus
our efforts on the management of those principal risks.
The principal risks we reported last year have evolved in nature, as has
our response to them, and we explain these changes in our principal
risks section below.
We also include comment on mitigation – that is, what we can do to
reduce the likelihood or impact of the risk – that we apply to help us
manage the risks. However, it is possible that not all mitigation will be
successful.
The principal risks and uncertainties should be considered in
conjunction with the risk management process, the forward-looking
statements for this document and the cautionary statement regarding
forward-looking statements.
Please see the cautionary statement regarding
forward-looking statements on page 175
Risk management
It is our aim to manage risk so that we can successfully deliver our
objectives, creating shareholder value while promoting the interests
of our many stakeholders through the safeguarding of our assets and
reputation.
We have in place group-wide risk management processes for the
identification, evaluation, response and subsequent monitoring of risks
which may significantly threaten the accomplishment of our objectives
and long-term strategic aim.
Our four stage risk management process is summarised below:
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During 2012 we introduced enhancements to our risk management
process, including:
Risk reporting
Improving the way we report risks to senior management, by providing
a clearer focus on the key areas of concern. This makes it easier for our
managers to take account of risks in their decision making.
Risk evaluation
Enhancing our evaluation of risks, for example through consideration of
when risks may materialise and when and how the impact may be felt.
This helps us make informed decisions about how we will respond to the
risks we face.
Risk training
Improving our risk training, such as through the development of new
computer-based training modules. We see continued education and
awareness as vital ingredients in developing and maintaining intelligent
risk management in our business.
Our risks
Overview
BusinessStrategy
Performance
Governance
Financial statements
Additional information Overview
BusinessStrategy
Performance
Governance
Financial statements
Additional information