Barclays 2009 Annual Report Download - page 88

86 Barclays PLC Annual Report 2009 www.barclays.com/annualreport09
Risk management
Risk factors
continued
Other Risk Factors
In addition to the 13 Principal Risks, the Group’s high-level risk classification
includes four other ‘Level 1’ risks. These risks are in general less amenable to
formal quantification than the Principal Risks in terms of risk measurement
or setting risk appetite. However, they retain the potential to impact the
Group’s performance.
Strategic Risk
The Group devotes substantial management and planning resources to
the development of strategic plans for organic growth and identification
of possible acquisitions, supported by substantial expenditure to generate
growth in customer business. If these strategic plans are not delivered as
anticipated, the Group’s earnings could grow more slowly or decline. In
addition, the Group’s strategy could be impacted by revenue volatility due
to factors such as macroeconomic conditions, inflexible cost structures,
uncompetitive products or pricing and structural inefficiencies.
Change risk
Change risk arises when the Group needs to make extensive changes to its
operations. The cost of implementation projects may overrun, or they may
fail to achieve their objectives. Examples of situations in which change risk
arises include the integration of acquired businesses, significant business
unit restructuring, changes in target operating models, the roll-out of new
and potentially disruptive technologies, the introduction of a single currency
such as the euro, and Group-wide projects to implement significant new
regulation such as Basel II.
Corporate sustainability risk
Corporate sustainability risk arises from the failure to identify and manage
the impact of business decisions and activities on the community and the
environment, covering the following themes: customers and clients,
inclusive banking, the environment, diversity and responsible global
citizenship. For more information, see page 22.
Brand management risk
Barclays defines brand risk as the failure to manage the visual identity of
Barclays brands in an effective manner. This is distinct from reputational
impact (damage to the general brand/reputation of Barclays), which is a
potential by-product of financial, strategic or operational risks.