20645_Scapa_AR_160504
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PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED<br />
Risk Accountable Executive Key controls and mitigating factors Risk movement<br />
M<strong>AR</strong>KET<br />
Customers<br />
Over-reliance on specific customers<br />
or markets<br />
Impact<br />
> > Places pressures on pricing,<br />
margins and profitability<br />
Heejae Chae<br />
Group Chief Executive<br />
> > Diverse range of customers with no specific<br />
weight towards one customer<br />
> > Our business strategy is tailored to reduce<br />
reliance on one particular market<br />
> > Winning new long-term contracts in healthcare<br />
helps spread risk and encourage growth<br />
> > Credit limits set based on Group policy, with<br />
limits monitored regularly and customers put<br />
on ‘stop’ as appropriate<br />
> > Credit insurance for worldwide turnover of<br />
North America and Europe (subject to policy<br />
limits and excesses)<br />
OPERATIONS<br />
Raw material pricing<br />
Excessively high raw material prices<br />
Impact<br />
> > Reduced competitiveness as<br />
a result of reducing margins<br />
and profitability<br />
Chris Carter<br />
Chief Operating Officer<br />
> > Global Supply Chain function in place with clear<br />
cost reduction targets<br />
> > Commodity prices are reviewed on a monthly<br />
basis by the supply chain team<br />
> > Contracts with suppliers are being renegotiated<br />
to further reduce our exposure to price changes<br />
> > Formula based on open book costing<br />
> > Dual sourcing based on regional alternatives<br />
> > Material substitution programme<br />
Human Resources<br />
Failure to attract and retain people<br />
with the right virtues and talents to<br />
sustain and grow our business<br />
Impact<br />
> > Inability to achieve our business<br />
objectives of sustainable growth<br />
> > Loss of skills, knowledge and<br />
experience<br />
Clare Douglas<br />
Group HR Director<br />
> > Global performance management system<br />
in place for the top 400 roles globally<br />
> > Performance related incentive schemes<br />
are in place across the business<br />
> > Talent Management Programme conducted<br />
globally for top 300 roles and forms the basis<br />
of the Succession Planning Programme<br />
currently being implemented<br />
> > Recruiting Excellence Programme embedded<br />
across the Group<br />
> > Introduction of a Global Induction Programme<br />
giving employees required information for<br />
effective transition into the business<br />
Risk remains the same<br />
Risk increases<br />
Risk decreases<br />
16<br />
SCAPA GROUP PLC ANNUAL REPORT AND ACCOUNTS 2016
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