Holiday Inn 2009 Annual Report Download - page 32

30 IHG Annual Report and Financial Statements 2009
Business review continued
The key elements of our risk management framework are
represented below:
In 2009, Global Risk Management worked with ‘ risk owners’ to
refresh risk registers and validate risks for continued relevance,
identify emerging risks and prioritise all risks in terms of financial
impact and likelihood of occurrence. Existing controls were
assessed as well as the ability, benefit and cost to improve them.
This work is documented in risk action plans which support the
risks reported in the Group Risk Register.
Global Risk Management’s role is to coach, co-ordinate, research
and challenge. The function also submits regular incident reports
and two full reports each year to the Executive Committee and the
Board on hotel safety and security as well as a further report on
the major risks to the Group.
Global Internal Audit is separately responsible for providing
assurance across the Group and provides reports on the internal
control framework to the Audit Committee. This ensures
separation of duties between the risk management and internal
audit functions and hence supports good governance.
Good governance is also supported through the leadership of
the Global Risk Working Group by the Company Secretary. This
ensures appropriate access to the Board, its Committees and both
the Chief Executive and the Chairman.
Risk mitigation activity
There are many risk control measures in place throughout IHG.
However in a dynamic environment it is important to anticipate
emerging and changing risks. The following paragraphs aim to
give an insight into this activity.
Uncertainty over liquidity sources continued in the financial
markets throughout 2009 and in light of this, but with positive
trends in the Eurobond markets in the latter part of 2009, the
decision was taken to refinance part of the Group’s bank debt
early. In December 2009, IHG issued a seven-year £250m bond,
successfully diversifying its funding sources and extending the
duration of a portion of its debt.
In response to increased information security issues, considerable
time and effort has been invested in identifying vulnerabilities to
security breaches and building capability and resilience into our
systems, including the adoption of payment card industry (PCI)
standards regarding data security. A responsible approach to
compliance on PCI has been laid out and considerable progress
has been achieved within our data centres and corporate
environments. Franchised, managed and owned properties are
also being handled in an appropriate manner to ensure the level of
awareness, risk and actions for compliance are taken. In addition,
a great deal of effort has been spent partnering with credit card
companies and credit card processors globally, to ensure our
measures are understood and are sound. Transparency and
oversight of the security programme is carried out by a senior
global council representing all major Group functions.
In 2009, we have concentrated on updating business continuity and
disaster recovery plans for the Group’s main business hubs and key
platforms. Recent flood events in the Philippines demonstrated the
ability of our Central Reservations Offices to move work around the
world with little impact on the business as a whole.
Hotel safety standards across regions, brands and business
models have been reviewed and transformed into a clear set of
global standards, enhancing safety and security further and
enabling greater consistency.
The threat posed by a global pandemic was anticipated and
planned for through documented contingency plans and response
procedures. This minimised the impact of the virus.
Security risks, particularly the threat of terrorism, continue to be a
significant concern for the hospitality industry as a whole. IHG has
developed a sophisticated response programme that is intelligence-
led and risk-based. The security risk environment is highly dynamic
and needs to be managed both centrally and locally in hotels. In
common with all risk strategies, there are three elements that IHG
continues to develop and maintain: physical and technical systems;
people capabilities; and processes and procedures.
Crisis management and communication plans have been refreshed
and there has been significant effort to train senior management
teams using worst case scenarios. Over the years a number of
serious incidents have been managed in line with these plans.
REGIONS
EXECUTIVE COMMITTEE
BOARD/AUDIT COMMITTEE
FUNCTIONS
GLOBAL RISK WORKING GROUP
MAJOR RISK REVIEW
BUSINESS UNIT RISK REGISTERS
GROUP RISK REGISTER