Carphone Warehouse 2015 Annual Report Download - page 44

Dixons Carphone plc Annual Report and Accounts 2014/15
Corporate Governance
Corporate Governance report
42
open discussion where challenge and debate is welcomed;
and
• The Committees each performed a self-evaluation of their
obligations on the basis of a detailed questionnaire relating
to each area of responsibility. No major areas for action were
identified.
Following the results of the evaluation, the Board confirms that
all directors continue to be effective and demonstrate a
commitment to the role, including having time to attend all
necessary meetings and to carry out other appropriate duties.
It was noted that one area for greater emphasis coming out of
this review was succession planning. At the time of the Merger
careful consideration was given to what skills were needed to
best lead the Group during this period of integration. The
Board was appointed accordingly. With the integration well
underway, the evaluation found that more emphasis now
needs to be placed on succession planning for these critical
board roles.
Capital and constitutional disclosures
Information on the Company’s share capital and constitution
required to be included in this Corporate Governance
statement are contained on page 45 of this report. Such
information is incorporated into this Corporate Governance
statement by reference and is deemed to be part of it.
Risk and internal controls
Risk management
The Group has established a risk management programme
that assists management to identify, assess and mitigate
business, financial, operational and compliance risks. The
Board views risk management as integral to good business
practice and protecting the best interests of shareholders.
Executive management of the Group has direct responsibility
for the risk management programmes of their businesses. The
Board’s focus is primarily on reviewing the effectiveness of
these processes, rather than involving itself in the processes
themselves. Specific controls and processes are detailed
further below.
The Group’s risk management framework aims to:
• assist management to implement effective means of risk
identification, assessment and mitigation;
• instil a risk-based approach and awareness into the Group’s
culture;
• encourage accountability for identifying and managing the
risks specific to line managers’ respective areas of the
business; and
• create and implement risk management strategies which
address all types of risks.
The Group maintains a risk register the principal risks of which
are set out on pages 16 to 19. Senior managers within the
business are responsible for managing and monitoring the
risks identified within their areas, and identifying new risks as
they arise. Each risk identified is ranked according to a score
based on the likelihood of an event occurring and its impact
on the business should it occur due to either failure or absence
of mitigating controls. Mitigating controls in place are also
documented.
Internal control
As in any business, the Group faces a number of risks and
uncertainties on a daily basis, and a detailed internal control
framework exists so as to mitigate these risks and protect the
interests of shareholders. The directors have overall
responsibility for the Group’s systems of internal control and
for reviewing effectiveness, and they discharge this
responsibility by performing the following:
• determining the Group’s risk appetite and tolerance;
• overseeing the risk management strategy; and
• ensuring that management implements effective systems
of risk identification, assessment and mitigation.
The Board delegates to executive management the
responsibility for designing, operating and monitoring these
systems. The systems are based on a process of identifying,
evaluating and managing significant risks and include the risk
management processes set out above.
The systems of internal control described in this report were in
place throughout the period under review and up to the date of
approval of the annual report and financial statements. The
effectiveness of these systems is periodically reviewed by the
Audit Committee in accordance with the Code, and the other
good practice guidance issued by the FRC in relation to
internal control. These systems are also refined as necessary
to meet changes in the Group’s business and associated risks.
They can only provide reasonable and not absolute assurance
against material errors, losses, fraud or breaches of laws
and regulations.
The Company has conducted an annual review of the
effectiveness of the systems of risk management and internal
control in operation during the year and up to the date of the
approval of the Annual Report and Accounts which was
approved by the Audit Committee and the Board.
At each of its meetings the Audit Committee reviewed and
considered reports on the status of the Group’s risk
management systems, findings from reviews of internal
controls and reports on the status of any weaknesses in
internal controls identified by the internal or external auditors.