Given the scale of our businesses, the Board of Directors recognises that the nature, scope and potential impact of our key business and strategic risks is subject to constant change. As such, the Board has implemented the necessary framework to ensure that it has sufficient visibility of the Group's key risks and the opportunity to regularly review the adequacy and effectiveness of our mitigating controls and strategies.
During the year the Board has also considered the nature and level of risk that we are prepared to accept in order to deliver our business strategies and have reviewed and approved our internal statement of risk appetite. This describes both the current and desired levels of acceptable risk, supported by high level qualitative risk statements, ensuring that risks are proactively managed to the level desired by the Board.
The Corporate governance report on page 42 of the Annual Report and Accounts 2012/13 describes the systems and processes through which the directors manage and mitigate risks. The Board considers that the principal risks to achieving its strategic aims are set out below. See pages 25 to 27 of the Annual Report and Accounts 2012/13 for further information.
Making it easier for
our customers to improve
- We fail to deliver demand and value through the "easier" initiatives due to a lack of rigorous change management disciplines, capabilities and resources.
Giving our customers
more ways to shop
- We fail to invest in the systems and supply chain platforms necessary to maintain either competitive parity or advantage, amongst online or omnichannel competitors.
- We fail to unlock the potential to generate further shareholder value through the optimisation of combined purchasing and commercial synergies, while retaining accountability at our Operating Companies.
Growing our presence
in existing markets
- Our investments in new store formats and customer proposition strategies fail to stimulate increased consumer spend and do not deliver the desired return to top line like-for-like growth in our mature markets.
- Uncertainty surrounding the resilience of the global economy and volatility in the Eurozone continues to impact both consumer confidence and the long term sustainability and capabilities of our supplier base
Expand in new and
- We lack the necessary agility and capability to identify, assess and take advantage of potential opportunities for overseas expansion and market penetration strategies for existing markets.
and connecting people
- We do not make the necessary investment in our people to ensure that we have the appropriate calibre of staff, skills and experience.
- A lack of perceived price competitiveness, particularly, when compared to more discount based or online competitors, would affect our ability to maintain or grow market share.
Key supplier resilience
- Key product suppliers lacking the necessary resilience or disaster recovery capabilities to manage the impact of ongoing global economic volatility or the increasing impacts of extreme weather cycles and patterns on their operations and extended supply chains.
Health & safety
- We fail to maintain a safe environment for our customers and store colleagues which results in a major incident or fatality that is directly attributable to a failure in our Health and Safety management systems.
Environmental or ethical failure
- Impact on Kingfisher's reputation and brand arising from a major environmental or ethical failure, a significant corporate fraud or material non-compliance with legislative or regulatory requirements resulting in punitive or custodial procedures.