Peachtree 2015 Annual Report Download - page 41

Principal Risk Risk Background Management and Mitigation
1. Business Model Transition
Sage does not successfully
manage the transition of its
business to a global
operating model
Primary strategic alignment:
Capacity for Growth
Sage has historically operated as a federated set of
Operating Companies across multiple geographies,
each with significant local autonomy.
In order to avoid duplication of effort, drive greater
consistency and efficiency in processes, and provide
clearer governance, Sage is moving to a new global
operating model.
This risk is an evolution from 2014. During 2015,
organisational and structural changes have been
successfully made, alongside planning for the wider
transition, including governance. Transition
implementation will run through 2016.
– Functional reporting for all support functions established to a
global level to allow consistency of direction, and removal of
any global / localconflicts
– An approved global Business Model Transition Strategy, supported
by an overarching plan which details the goal,
overall time plan, and scheduled adoption by countries
– Clear governance around strategy and overarching plan through
Executive Commiee and programme steering commiee
– Identification of a programme authority lead to manage
the transition
In progress:
– Alignment of transition frameworks for each country / region /
function which are integrated to the overarching plan,
and approved by the programme steering commiee
– Monitoring of implementation through the programme
management office
Principal risks
We continue to evolve our risk management process and associated reporting activities.
The Directors have carried out an assessment of the principal risks
facing the Company, including those that would threaten its business
model, future performance, solvency or liquidity, and these risks are
further detailed below. We continue to monitor the risk environment,
and review the appropriateness of the principal risks to the business,
and these are formally reviewed at the beginning of each year.
At a global level we formally report against these principal risks on a
quarterly basis, as well as escalated local and regional risks. During 2015
we have enhanced our reporting activities, with the definition of clear
appetite statements for each principal risk and identification of
supporting metrics which can be reported. Risk dashboards have been
revised to incorporate these changes. In addition we have revised
ourRisk Management Policy to simplify risk rating and facilitate the
escalation of local risks. This is further supported through the Global
and Regional Risk Commiees.Moving forward we will further develop
our metric driven risk reporting.
The risk landscape continues to change as both the business and
marketplace evolve. The pace of change, and need for greater visibility
across the organisation, continue to grow and the risk function and
practices are developing to meet these challenges.
The creation of the Global and Regional Risk Commiees is seen as a
significant step in embedding consistent activities across the business,
enhancing the ability to respond, and support the move to a global
operating model. The membership of the Risk Commiees reflects
and represents all relevant facets of the business, ensuring that risk
is considered and developed within the wider considerations of the
business, and that market pressures and changes are considered
in a timely manner.
Currently there are ten principal risks which we monitor and report
against at a global level. The risks are arranged according to their
alignment, seven are aligned to successful delivery of the Strategy
(risks 1-7 below), and three are aligned operationally (risks 8-10 below).
A number of measures are in place to manage and mitigate these risks,
while other activities are in the process of being developed or deployed,
and are marked below as in progress.
The Sage Group plc | Annual Report & Accounts 2015 39
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