20645_Scapa_AR_160504

RISK MANAGEMENT
EMBEDDED RISK MANAGEMENT SYSTEMS
HAVE SUPPORTED THE GROUP IN PURSUING
ITS STRATEGY FOR GROWTH
RISK MANAGEMENT
Risk is an inherent part of doing business.
A successful risk management process
balances risk and reward and is underpinned
by sound judgement of their impact and
likelihood. The Group Board has overall
responsibility for ensuring that Scapa has
an effective risk management framework,
which is aligned to our objectives.
The Executive Team, Audit and Risk
Committee and Board review risks which
could affect the Group throughout the year.
Risk and issue tracking systems are
reviewed by our Group Risk & Assurance
team on a regular basis to ensure that the
framework is in line with good practice in risk
management and that agreed mitigation
plans are being adhered to.
We take the view that the policies,
procedures and monitoring systems that
are in place are sufficient to effectively
manage the risks faced by our business.
SCAPA’S APPROACH TO
RISK MANAGEMENT
Scapa adopts both a Top down and Bottom
up approach to risk to manage risk exposure
across the Group to enable the effective
pursuit of strategic objectives. The approach
is summarised in the diagram below.
Risk identification
Risks exist within all areas of our business
and it is important for us to identify and
understand the degree to which their impact
and likelihood of occurrence will affect the
delivery of our key objectives.
The recording of risks at Scapa is achieved
through our risk management model. Their
identification is achieved through day-to-day
working practices including horizon scanning
for legislative changes, professional body
alerts, strategic planning, operational
reviews, accident and incident reporting,
project governance procedures and
independent systems audits.
In addition to ongoing risk identification,
the Group’s risk universe is reviewed on
an annual basis. This exercise relies on
risk intelligence being gathered from:
> > Top down – through participation from the
Executive Team, senior management and
departmental experts (including Quality,
Health & Safety, Supply Chain and
Research & Development) and giving
consideration to the Group’s strategy,
related objectives and any barriers to
the achievement of these objectives
INTEGRATED APPROACH TO RISK MANAGEMENT
TOP DOWN
STRATEGIC RISK MANAGEMENT
BOTTOM UP
OPERATIONAL RISK MANAGEMENT
MANAGING RISK FROM THE TOP DOWN
> Provision of guidance on the Group’s approach
to risk management and establishing parameters
for risk appetite and associated decision-making
> Identification, review and management of identified
Group strategic risks and associated actions
> Ongoing consideration of environmental risks
> Setting the risk appetite of the Group
> Directing delivery of the Group’s identified actions
associated with managing risk
> Identification and monitoring of the key risk indicators
and taking timely action where appropriate
> Execution of the delivery of the Group’s identified
actions associated with managing risk
> Timely reporting on the implementation and
progress of agreed action plans
> Provision of key risk indicator updates
Board and
Audit and Risk
Committee
Executive
Team and
Leadership
Team
Business Units
> Assessing the effectiveness of the risk
management processes adopted across the Group
> Challenging the content of the strategic risk
registers to facilitate the documentation of
comprehensive and balanced assessment of risk
> Reporting on the principal risks and uncertainties
of the Group
> Responsible for reviewing the completeness and
consistency of the operational risk registers across
business units and the Group
> Challenging the appropriateness and adequacy
of proposed action plans to mitigate risk
> Analysing and giving consideration to the aggregation
of risk across the Group
> Provision of cross functional/business unit resource
to effectively mitigate risk where appropriate
> Identification and reporting of strategic risks to the Board
> Provision of reports and data relating to significant
emerging risks to the Group (internal and external)
> Implementation of a risk management approach
which promotes the ongoing identification,
evaluation, prioritisation, mitigation and monitoring
of operational risk
> Identification, evaluation, prioritisation, mitigation
and monitoring of operational risks which are the
responsibility of each subsidiary company
> Identification of strategic risks which are reported
to the Group
MANAGEMENT RISK FROM THE BOTTOM UP
EFFECTIVE PURSUIT OF STRATEGIC OBJECTIVES
12
SCAPA GROUP PLC ANNUAL REPORT AND ACCOUNTS 2016