2010 REGISTRATION DOCUMENT (3.4 Mo) - Groupe Casino

5CORPORATE GOVERNANCEChairman’s ReportObjectives of risk managementThe key objectives of risk management are to:■■■■create and preserve the Company’s value, assets and reputation;secure decision-making and the Company’s processes to attainits objectives;promote consistency of the Company’s actions with its values;bring all employees together behind a shared vision of the mainrisks.Components of the risk management system• OrganisationThe risk management system is decentralised and overseen by theparent company’s Senior Management. The heads of each businessunit are therefore responsible for identifying, analysing and dealingwith the main risks to which they are exposed. They may ask GroupInternal Control and its network for support in identifying risks.The Group also has a Risk Prevention Committee, whose practicesand procedures were updated in 2010. Permanent members of theCommittee include representatives from Group Human Resources,Insurance, Internal Control, Legal Affairs, Quality and Communications,as well as an adviser to the Chairman. Group Internal Audit attendsmeetings as an observer. Other people may be invited to attenddepending on the issues addressed.The Committee’s role is to steer the Company’s risk managementsystem and ensure a consistent overall approach to preventing risksthat could have a significant impact on the Company’s achievement ofits strategy or objectives or, more generally, on its long-term survival.It is supported by the business unit heads who are responsible fordefining the risk management policy and the control systems requiredfor its effective application.The Group also has a dedicated crisis management unit which includesrepresentatives of Senior Management and, on a need basis, anyother in-house or external capability that may be required.• Risk management processRisk identificationThe Casino Group is exposed to various types of risk, including marketrisk, operational risk and legal risk. These risks have been mappedand are described in the section of the annual report entitled “Riskfactors – Insurance”.Each business unit is responsible for identifying the specific risks towhich its operations are exposed. It is supported in this task by GroupInternal Control, which has been working on developing specific riskidentification tools during the year. These tools are sent to the businessunits heads, who are responsible for updating them regularly.Risk analysisRisks identified by each business unit are analysed and quantifiedunder the responsibility of the business unit head. The work of GroupInternal Control is underpinned by the risk identification tools and riskmapping. Its role and work are described in the section of this reporton “Organisation of the internal control system”.Identified risks are reviewed regularly during internal audit assignments.They are evaluated according to their impact, likelihood of occurrenceand strategic importance, as well as in light of the existing internalcontrol system. Tests are conducted to assess internal controls,evaluate the residual risk and issue recommendations on implementinga new or improving an existing internal control process.The work carried out by the Internal Audit department is describedin greater detail in the section of this report on “Monitoring of internalcontrol”.Risks likely to lead to crisis situations are assessed and prioritised atlocal level by the business unit heads.Risk managementThe control activities described below are aimed at reducing thoserisks identified by each business unit head and at group level whoseoccurrence could prevent the Group from achieving its objectives.In addition, the various risk identification and analysis toolsare monitored by the business units, which are responsible forimplementing plans to mitigate the risks. Group Internal Control maybe involved in implementing means of risk mitigation. For example, itruns a fraud risk awareness programme to help business unit headsset up an appropriate fraud prevention plan.Internal Audit ensures that internal controls are properly performedand identifies any residual risk. Recommendations made by InternalAudit are used to establish action plans designed to mitigate risks.Through its follow-up audit role, it also ensures that the risks identifiedduring its initial audit assignments are duly dealt with.Each business unit is responsible for organising a business continuityplan and setting up a process for reporting critical information andmanaging potentially harmful events.Local management may, if necessary, call on the Group crisismanagement unit for support.Group Insurance is responsible for insuring all insurable risks forsubsidiaries, where permitted by local legislation, and for taking outand managing the appropriate insurance policies on a centralisedbasis. It plays a cross-functional role in operational management ofinsurance and in risk prevention.It is directly responsible for taking out insurance policies coveringFrench subsidiaries and coordinates and oversees insuranceprogrammes taken out by the Group’s international subsidiaries.The Insurance department is also involved in monitoring claimsand receives information from business units about events anddevelopments likely to change the terms and conditions of existinginsurance policies.• Ongoing oversight of the risk management systemThe risk management system is monitored and reviewed regularlyby the business unit heads. Internal Audit takes part in the oversightprocess through its audit assignments with the aim of contributingto continuous improvements.General internal control principlesDef inition of internal controlGroupe Casino’s internal control system, which is defined andimplemented under the responsibility of the parent company, isdesigned to help maintain control over its business operations, achieveits operations effectively and make efficient use of resources, whilsttaking appropriate account of the major risks that could prevent theCompany from achieving its objectives.Internal control objectivesMore specifically, it aims to provide reasonable assuranceregarding:■■■■compliance with applicable laws and regulations;compliance with instructions and guidance issued by SeniorManagement;proper application of processes, particularly with regard tosafeguarding the Group’s assets;reliability of financial information.186 Casino Group | Registration Document 2010