Unilever 2015 Annual Report Download - page 63

DESRIPTION OF RISK WHAT WE ARE DOIN TO MANAE THE RISK
SYSTEMS AND INFORMATION
Unlever’s operatons are ncreasngly dependent on IT systems
and the management of nformaton
Increasng dgtal nteractons wth customers, supplers and
consumers place ever greater emphass on the need for secure and
relable IT systems and nfrastructure and careful management of
the nformaton that s n our possesson
Dsrupton of our IT systems could nhbt our busness operatons
n a number of ways, ncludng dsrupton to sales, producton and
cash flows, ultmately mpactng our results
There s also a threat from unauthorsed access and msuse of
senstve nformaton Unlever’s nformaton systems could be
subect to unauthorsed access or the mstaken dsclosure of
nformaton whch dsrupts Unlever’s busness and/or leads to
loss of assets
Hardware that runs and manages core operatng data s fully
backed up wth separate contngency systems to provde real
tme back-up operatons should they ever be requred
We mantan a global system for the control and reportng of
access to our crtcal IT systems Ths s supported by an annual
programme of testng of access controls
We have polces coverng the protecton of both busness
and personal nformaton, as well as the use of IT systems and
applcatons by our employees Our employees are traned to
understand these requrements
We have standardsed ways of hostng nformaton on our
publc webstes and have systems n place to montor complance
wth approprate prvacy laws and regulatons, and wth our
own polces
BUSINESS TRANSFORMATION
Successful executon of busness transformaton proects s
key to delverng ther ntended busness benefts and avodng
dsrupton to other busness actvtes
Unlever s contnually engaged n maor change proects, ncludng
acqustons and dsposals and outsourcng, to drve contnuous
mprovement n our busness and to strengthen our portfolo
and capabltes
Falure to execute such transactons or change proects
successfully, or performance ssues wth thrd party outsourced
provders on whch we are dependent, could result n under-
delvery of the expected benefts Furthermore, dsrupton may
be caused n other parts of the busness
All acqustons, dsposals and global restructurng proects
are sponsored by a member of the Unlever Leadershp Executve
Regular progress updates are provded to the Unlever
Leadershp Executve
Sound proect dscplnes are used n all merger, acqustons,
restructurng and outsourcng proects and these proects are
resourced by dedcated and approprately qualfed personnel
The performance of thrd party outsourced provders s kept under
constant revew, wth potental dsrupton lmted to the tme and
cost requred to nstall alternatve provders
Unlever also montors the volume of change programmes under
way n an effort to stagger the mpact on current operatons and
to ensure mnmal dsrupton
EXTERNAL EONOMI AND POLITIAL RISKS AND
NATURAL DISASTERS
Unlever operates around the globe and s exposed to a range
of external economc and poltcal rsks and natural dsasters
that may affect the executon of our strategy or the runnng of
our operatons
Adverse economc condtons may result n reduced consumer
demand for our products, and may affect one or more countres
wthn a regon, or may extend globally
overnment actons such as fscal stmulus and prce controls can
mpact on the growth and proftablty of our local operatons
Socal and poltcal upheavals and natural dsasters can dsrupt
sales and operatons
In 2015, more than half of Unlever’s turnover came from emergng
markets ncludng Brazl, Inda, Indonesa, Turkey, South Afrca,
hna, Mexco and Russa These markets offer greater growth
opportuntes but also expose Unlever to related economc,
poltcal and socal volatlty
The breadth of Unlever’s portfolo and our geographc reach
help to mtgate our exposure to any partcular localsed rsk
to an extent Our flexble busness model allows us to adapt
our portfolo and respond quckly to develop new offerngs
that sut consumers’ and customers’ changng needs durng
economc downturns
We regularly update our forecast of busness results and cash
flows and, where necessary, rebalance nvestment prortes
We have contnuty plannng desgned to deal wth crss
management n the event of poltcal and socal events and
natural dsasters
We beleve that many years of exposure to emergng markets
have gven us experence of operatng and developng our busness
successfully durng perods of economc, poltcal or socal change
TREASURY AND PENSIONS
Unlever s exposed to a varety of external fnancal rsks n
relaton to Treasury and Pensons
The relatve values of currences can fluctuate wdely andcould
have a sgnfcant mpact on busness results Further, because
Unlever consoldates ts fnancal statements n euros t ssubect
to exchange rsks assocated wth the translaton of the underlyng
net assets and earnngs of ts foregn subsdares
urrency exposures are managed wthn prescrbed lmts and by
theuse of forward foregn exchange contracts Further, operatng
companes borrow n local currency except where nhbted by
local regulatons, lack of local lqudty or local market condtons
We also hedge some of our exposures through the use of foregn
currency borrowng or forward exchange contracts
56 Unilever Annual Report and Accounts 2015Governance
RISKS ONTINUED