BAE-annual-report-2014

Strategic Report
9. INFORMATION TECHNOLOGY SECURITY
The Group could be negatively impacted by information technology security threats.
Description
– The security threats faced by the Group
include threats to its information technology
infrastructure, unlawful attempts to gain
access to its proprietary or classified
information and the potential for business
disruptions associated with information
technology failures.
Impact
– Failure to combat these risks effectively could
negatively impact the Group’s reputation
among its customers and the public, cause
disruption to its business operations, and
could result in a negative impact on the
Group’s future results and financial condition.
Mitigation
– The Group has a broad range of measures
in place, including appropriate tools and
techniques, to monitor and mitigate this risk.
10. PEOPLE
The Group’s strategy is dependent on its ability to recruit and retain people with appropriate talent and skills. All employees are
required to act in accordance with the Group’s policies.
Description
– Delivery of the Group’s strategy and business
plan is dependent on its ability to compete to
recruit and retain people with appropriate
talent and skills, including those with
innovative technological capabilities.
– With constraints on defence spending in its
UK and US markets, the Group’s business
plan is targeting an increasing level of
business in international export markets. It is
important that the Group recruits and retains
management with the necessary international
skills and experience in the relevant
jurisdictions.
– It is important that all employees act in
accordance with the requirements of the
Group’s policies, including the Code of
Conduct, at all times.
Impact
– The loss of key employees or inability to
attract the appropriate people on a timely
basis, in particular to deliver the Group’s
strategy in international markets, could
adversely impact its ability to meet the
business plan and, accordingly, have a
negative impact on the Group’s future
results and financial condition.
Mitigation
– The Group recognises that its employees are
key to delivering its strategy and business
plan, and focuses on developing the existing
workforce and hiring talented people to meet
current and future requirements.
– The Group has well-established graduate
recruitment and apprenticeship programmes
and, in order to maximise the contribution
that its workforce can make to the
performance of the business, has an
effective through-career capability
development programme.
– In order to seek to maximise its talent pool,
the Group is committed to creating a diverse
and inclusive environment for its employees.
– BAE Systems continues to embed its ethics
programme globally, driving the right
behaviours by supporting employees in
making ethical decisions and embedding
responsible business practices.
Changes in principal risks
As a result of its assessment of the Group’s principal risks referred to on page 48, the Board has determined
that the following risks, identified as principal risks in the 2013 Annual Report, while still risks for the Group,
are no longer considered to be principal risks:
1. THE GROUP IS DEPENDENT UPON COMPONENT AVAILABILITY, SUBCONTRACTOR PERFORMANCE AND KEY SUPPLIERS
In the improving global economic environment, the Group has not identified any specific, material risks in relation to its
strategically important subcontractors or suppliers.
2. THE ANTICIPATED BENEFITS OF ACQUISITIONS MAY NOT BE ACHIEVED
The Group has not engaged in acquisitions other than bolt-on acquisitions in the last three years.
3. THE GROUP IS INVOLVED IN CONSORTIA, JOINT VENTURES AND EQUITY HOLDINGS WHERE IT DOES NOT HAVE CONTROL
Whilst the Group has such joint ventures, the principal ones being Eurofighter, MBDA and Air Astana (as referred to on page 125),
its relationships with the joint venture partners are such that the risk of disagreement leading to failure to meet the strategic
objectives of those joint ventures is not currently regarded as a principal risk to the Group.
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Additional risks and uncertainties currently unknown to the Group, or which the Group currently deems immaterial, may also have an adverse
effect on the business or financial condition of the Group.
BAE Systems
Annual Report 2014
53