Experian 2007 Annual Report Download - page 37

Experian Annual Report 2007 |35
Risks and uncertainties
As described under corporate
objectives and strategy on page 19,
Experian’s vision is that our people,
data and technology become a
necessary part of every major
consumer economy around the world.
The major potential risks to achieving
this are either specific to Experian, such
as information security, or more
general such as the impact of
competition. Risks to Experian are
anticipated and regularly assessed and
our internal controls are enhanced
where necessary to ensure that such
risks are appropriately mitigated.
We have identified the following major potential risks.
Specific risks for Experian
People
Experian is dependent upon highly skilled personnel,
especially our senior management and other experienced
staff. Loss of these people could have an adverse effect on
our ability to deliver our corporate objectives. We aim to
provide compensation and benefits that are competitive with
other leading companies, as well as fulfilling future career
opportunities.
Data
The data that Experian holds may be inappropriately used.
Experian has established rigorous information security
policies, standards, procedures, recruitment and training
schemes, which are embedded throughout our business
operations. We also screen new third party partners carefully
and conduct targeted audits on their operations. The loss
and/or potential misuse of consumer data is addressed both
procedurally through continued investment in IT security
infrastructure, including the significant use of data and
communications encryption technology around the world.
Legislation or government regulations may alter what data
Experian can collect and how we collect it. To the best of
our knowledge, we are in compliance with data protection
requirements in the jurisdictions in which Experian operates.
We actively monitor our collection and use of personal data,
while our legal, regulatory and government affairs
departments work closely with senior management to adopt
strategies to educate lawmakers and influence the public
policy debate where appropriate around the world.
Technology
There could be security breaches of Experian’s systems
and processes or our systems could fail. Our data centres
are protected against damage from fire, power loss,
telecommunications failure, natural disaster, hardware or
software malfunction, computer viruses or other purposeful
attacks, such as physical break-ins or hacking. To mitigate
the risk from insecure or unreliable IT systems, we maintain
off-site copies of all information contained in databases, run
back-up data centres, have established support
arrangements with third party vendors and have strict
standards, procedures and training schemes for technology
services, physical security, information security and business
continuity.
Other risks
Experian could face increased competition, especially in
the credit reporting industry. We mitigate this risk through
continued research and investment in people, technology
and products as prioritised by our strategic plan.
There may be consolidation among Experian’s clients,
which may cause price compression and a reduction in
our sales and profits. However, no single client accounts for
more than 3% of our sales, which reduces the probability of
this potential risk having a significant impact on us.
Acquisitions may not meet expectations. We assess all
acquisitions rigorously using both in-house expertise and
that of professional advisors.
There may be an economic downturn in one of Experian’s
major markets, which impacts the demand for consumer
credit in particular. As described on page 16, the breadth of
Experian’s portfolio by product, by geography, by sector and
by client partly mitigates the impact of this risk.
The outcome of litigation could be unfavourable to
Experian. We carry insurance cover against such risks and
employ numerous expert legal personnel in-house and
retain the services of several leading legal practices around
the world to assist in the effective management and
disposal of legal proceedings.
Experian could fail to protect adequately its valuable
intellectual property rights or face claims for intellectual
property right infringement. Experian seeks patent
protection and appropriate agreements regarding its
intellectual property rights where appropriate and feasible
and continues to monitor this situation.
Further discussion of risks facing Experian can be found in
the prospectus for the global offer, dated 14 September
2006, which is available on our website at
www.experiangroup.com.