The principal risks and uncertainties facing the Group are summarised on the following page. The disclosure of risks and uncertainties in the table opposite reflects the approach of the Company to also look for the opportunities presented when addressing significant risks.
The principal risks are formally reviewed, twice per year by the Board. Updates in terms of emerging risks or significant actions undertaken are addressed as and when required at Board meetings. The principal risks are determined through an evaluation of likelihood of occurrence and potential impact, with a full review also undertaken by the Global Executive Team (GET), comprising the CEO and his direct reports.
Management also review specific strategic, operational, financial and compliance risks in regular focused forums during the year, at GET meetings, quarterly business reviews with each of the businesses, major programmes and project reviews, and at other key Executive management meetings. Further details on our risk management and internal control procedures are included on page 56 of our 2013/14 Annual report.
|Risks and Uncertainties||Mitigating Actions||Opportunity|
|We continue to build our high service proposition by adding new technologies and a broad range of products, working closely with suppliers as we provide end-to-end solutions throughout their product development process.||We continue to implement strategic initiatives to build customer loyalty and provide a differentiated proposition for our customer base. Our proposition is increasingly personalised to meet the needs of customers in targeted segments. Fragmentation of the marketplace allows us opportunities to win business and create further barriers to entry from smaller competitors.|
|Competitive advantage in the web channel is not maintained||The Digital Advisory Board includes external subject matter experts to provide advice and guidance to the Board and eCommerce team.||Implementation of the global web platform will enable the Group to enhance its online proposition faster and more efficiently.|
|Recruitment, development or retention of talented people||We actively measure the retention of talent within our organisation which enables us to track trends and respond with the appropriate and necessary actions.
Annual employee engagement surveys enable progress of our people actions to be monitored, areas of improvement identified and actions put in place.
Reward schemes are continuously evaluated to drive and reward performance and ensure retention of key talent.
|We seek actively to engage employees by focusing on training and development, customer relationships, leadership, social responsibility and communications.|
|Data and content quality inhibit effectiveness of our eCommerce strategy||A dedicated data function has been established to ensure compliance with internal processes and external regulations.
A data strategy and governance framework has been developed to support the information requirements of our strategic programmes.
|Continued investment in data and data management processes to provide our customers with high quality product information and suppliers with rich insights into customer behaviour.|
|Insufficient progress with improving performance in North America||We have a fully integrated multichannel sales and marketing plan aimed at addressing the needs of our customers, including a focus on specific segmentation by type of customers and vertical industries.||By enhancing and better targeting our offering, we can significantly improve operating performance in North America by taking market share and attracting customers to our online environment. A new Business President has been appointed to lead the region and execute its strategy.|
|Failure to leverage the investment made in Asia Pacific||Best practice and personnel leveraged from around the Group to ensure delivery.||We continue to invest and effect structural growth in our key Asia Pacific markets.
Investments in global inventory and our proposition will significantly benefit our customers in Asia Pacific.
|Significant failure or inefficiencies in our systems and infrastructure||Business continuity plans are kept under review for all our locations.
Ongoing review of our IT infrastructure and conduct regular testing of our systems.
|We continually improve workflows and operational efficiencies and provide increased capacity and investment in capability.|
|Legal and regulatory risks||We have exposure to a number of countries and their respective legal compliance requirements are addressed through a variety of controls.||The increase in environmental legislation for electronics, such as the introduction of REACH, allows us to provide real value to our customers through our legislative expertise.|
|Long term evolution of the electronic component distribution model||Software and services is increasingly part of our offering to product development customers. This increases the value that they extract from our proposition while diversifying our business model away from pure distribution.
The Group takes actions to reduce the impact of its business on the environment through carbon emissions and by encouraging recycling, especially of packaging.
Regional warehouse model reduces impact of carbon emissions compared to alternatives.
|Environmental and technology trends are sources of electronics innovation which underpin sales to our product development customers.
Through ongoing focus on reducing the environmental impact of doing business, we are introducing more efficient processes and can offer further complementary services to our customers.