Holiday Inn 2014 Annual Report Download - page 29

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Holistic approach to risk assessment
IHG conducts risk assessments to identify, prioritise and inform decisions on risk mitigation. Risks are first assessed from an inherent
or gross risk perspective (unmitigated risk). Then, internal controls and mitigation activities are identified and developed resulting in
a residual or net risk assessment (mitigated risk, net of controls). This is informed by the performance monitoring of internal key risk
indicators, which provide objective evidence as to how effectively the risk is being managed. IHG and its Board think broadly and
holistically about potential risks to the business, across the following categories:
Risk What are these? Who manages them?
Strategic Risks arising from IHG’s relationship with the external
environment that can impact on IHG’s ambition and
strategy over the long term.
Include major market and environmental changes or
events that could impact our reputation across key
stakeholder groups.
• Leadership is provided by the Board, the Executive
Committee, the Regional Operating Committees
and functional leadership teams.
• Expertise, co-ordination and oversight is provided
by Global Strategy in conjunction with Global Risk
Management to drive IHG’s leadership to make
decisions around its portfolio of brands, key markets,
business model and approach to ethics and other
reputational matters.
Tactical Risks that could impact the delivery of IHG’s one to
three-year commitments.
Include, but are not limited to, factors influencing IHG’s
ability to sign and open new hotels, the performance
of existing hotels and the delivery of projects that align
with strategic planning processes.
• Performance and delivery risks are managed by
senior leaders and reported to the Regional Operating
Committees and functional leadership teams.
• Project risks are managed by project management
teams with oversight provided by our internal
Programme Office and supported by Global
Risk Management.
Operational Risks which include a wide spectrum of day-to-day risks
that frontline hotel colleagues and corporate teams face
when dealing with guests or ensuring corporate systems
and processes are running smoothly.
Include, but are not limited to, those managing the safety
and security of our people and assets, the continuity of
the business, third-party service providers and the wider
supply chain.
• Operational risks are managed by frontline hotel
colleagues.
• Oversight is provided, in the context of the managed
and franchised business models, by specialist
functional teams, with leadership provided by the
Regional Operating Committees.
• Due to the nature of operational risks, IHG
typically mitigates these through policies,
operational and business processes and other
internal controls supported by systems, tools and
training. Subject-matter expertise, leadership and
co-ordination is provided by Global Risk Management
and functional specialists.
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