Annual Report 2008 - Securitas

Business Risk Evaluation Model
Securitas uses a business risk evaluation model to evaluate the operational risks in new and
existing businesses. The model, which can be broken down into four stages, focuses on the
important dimensions of the assignment and the relationship with the customer. In each of
these stages, risks and opportunities are weighed and managed in a balanced manner, hence
the balance symbol.
Assignment
This is the first stage of the process. The
key points are the size of the project, its
duration and whether it involves a new
or existing service. Specific training and
supervision requirements are also con-
sidered.
Financials
This stage involves careful calculation of
the profitability of the business. Mana-
gers have to assess the investment requi-
red and whether the contract involves
any off­balance­sheet exposure. Pay-
ment terms also have to be considered,
and a decision made as to whether the
assignment will generate sufficient profit
in relation to the risks.
Risk
The type of customer under considera-
tion is of importance in terms of the level
of operational risk and financial status.
High-risk customers and large loss
potential must be identified and checks
must be performed to ensure that the
necessary insurance is in place for the
risk involved. The creditworthiness of
the customer must also be assessed.
Contract
A fair division of responsibilities and
risks between Securitas and the custo-
mer is essential in every contract. Stan-
dardized contracts are the norm. Reaso-
nable caps on potential liability and
indemnification for third­party claims
are important.
Securitas’ management
Risks and risk management
Securitas Annual Report 2008
39