Punch Taverns plc 2011 Annual Report

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Punch Taverns plc
Annual Report and Financial Statements 2011
Operating review continued
Our risks and uncertainties
Our approach to managing risks and uncertainties
Punch has a formal risk management process in place which
is designed to identify, evaluate and manage the risks and
uncertainties to which it is exposed.
Management teams from across the Group carry out regular
risk workshops and update our risk register. Risks are highlighted
and then assessed based on the probability of them occurring
and the impact they could have on the business. A consistent
approach for reporting risks on a risk matrix ensures that Punch
is able to prioritise its risks. Mitigation plans are implemented
where necessary to ensure that risks are managed appropriately.
The Board has ultimate responsibility for the risk management
framework and formally reviews the material risks to the Group
regularly as well as discussing changing or emerging risks
on an ongoing basis. The Board is responsible for ensuring
that business risks are appropriately managed by the executive
management team and monitors recently introduced key
risk performance measures on a periodic basis, to track the
movement of these key risks.
Punch is exposed to a variety of financial, operational, economic
and regulatory risks and uncertainties. Our main risks and
how we manage them are shown on the following pages;
however, this is not an exhaustive list of all of the risks which
Punch is exposed to. Some of the risks Punch faces are external
and therefore beyond our control. Some risks may not be known
at present or may be considered to be currently immaterial,
but could develop into material risks in the future. The risk
management processes are therefore designed to manage
the risks which may have a material impact on our ability to
meet our strategic objectives, rather than fully mitigate all risks.
The Board is aware that these risks and uncertainties may
either singularly or collectively affect Punch’s revenue, our costs,
the value of our assets, our reputation or our ability to meet our
strategic objectives and it is therefore committed to continually
reviewing and improving the risk management framework.
The Internal Audit function provides assurance to the Board
on key controls and the management of risks within Punch.
The Audit Committee annually reviews the overall effectiveness
of the risk management framework.
Group risk matrix
Risk management framework
G
Gross risk prior to mitigation plans
N
Net risk after mitigation plans
Very high
G
G
Identify and
evaluate risks
Probability
High
Medium
Monitor and track
progress and
key risk KPIs
Risk management
framework
Plc Board
Management
Departments
Risk owners
• Risk workshops
• Assess risk tolerance
and risk appetite
• Update to risk registers
• Risk matrix reporting
Identify controls
or mitigation
already in place
Low
Implement
mitigating
action plans
Test controls
Very low
N
N
Negligible
Marginal Significant Major Catastrophic
Impact