Annual Report PDF - Carphone Warehouse Group plc

Corporate Governance continued www.cpwplc.com 25and the Committee determined that their appointments were part of theCompany’s orderly succession plans so as to maintain the appropriatebalance of skills and experience within the Company on the Board.All of the above recommendations were unanimously approved by the Board.Risk management and internal controlThe Company has established a risk management programme that assistsmanagement throughout the Company to identify, assess and mitigatebusiness, financial, operational and compliance risks. The Board viewsmanagement of risk as integral to good business practice. The programmeis designed to support management’s decision-making and to improvethe reliability of business performance.The risk management programme is supported by a dedicated team ofrisk specialists, including internal auditors, who comprise the Group Riskand Assurance function. To ensure that all parts of the Company have agood understanding of risk, members of this team have conducted riskworkshops and reviews within each of the main operating divisions in thepast year, culminating in an assessment of key business risks by theExecutive Directors and senior management. These risk assessmentshave been wide-ranging, covering risks arising from the regulatoryenvironment, strategy, counter-parties and organisational changeassociated both with major projects and with acquisitions. The riskmanagement process operates throughout the Company, being appliedequally to the main business divisions and corporate functions.shareholder concerns. The principal communication media used toimpart information to shareholders are news releases (including resultsannouncements) and Company publications. In all such communications,care is taken to ensure that no price sensitive information is released.The Chief Executive Officer and Chief Financial Officer have leadresponsibility for investor relations. They are supported by a dedicatedinvestor relations department that, amongst other matters, organisespresentations for analysts and institutional investors. There is a fullprogramme of regular dialogue with major institutional shareholders, fundmanagers, analysts, retail brokers and credit investors, upon which theChairman ensures that the Board receives regular updates at Boardmeetings. The Board also receives periodic reports on investors’ viewsof the performance of the Company. All the Non-Executive Directors and,in particular, the Chairman and Senior Independent Director, are availableto meet with major shareholders, if such meetings are required. Furtherfinancial and business information is available on the Company’swebsite, www.cpwplc.com.The Company also communicates with shareholders through the AnnualGeneral Meeting, at which the Chairman gives an account of the progressof the business over the last year, and a review of current issues, andprovides the opportunity for shareholders to ask questions.The output from each annual assessment is a list of key strategic, financial,operational and compliance risks. Associated action plans and controls tomitigate them are also put in place where this is possible and to the extentconsidered appropriate by the Board taking account of costs and benefits.Changes in the status of the key risks and changes to the risk matrix arereported regularly to the Audit Committee and at each Board Meeting.The Directors have overall responsibility for the Group’s systems of internalcontrol and for reviewing their effectiveness. The Board delegates toexecutive management the responsibility for designing, operating andmonitoring these systems. The systems are based on a process ofidentifying, evaluating and managing key risks and include the riskmanagement processes set out above. The systems of internal controlwere in place throughout the period and up to the date of approval ofthe Annual Report and financial statements. The effectiveness of thesesystems is periodically reviewed by the Audit Committee in accordancewith the guidance in the Turnbull Report. These systems are also refined asnecessary to meet changes in the Group’s business and associated risks.GovernanceThe systems of internal control are designed to manage rather thaneliminate the risk of failure to achieve business objectives. They can onlyprovide reasonable and not absolute assurance against material errors,losses, fraud or breaches of laws and regulations.The Board has conducted an annual review of the effectiveness of thesystems of risk management and internal control in operation duringthe year and up to the date of the approval of the Annual Report andfinancial statements.Communication with investorsThe Board believes it is important to explain business developments andfinancial results to the Company’s shareholders and to understand any