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 are 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. The Board has considered the risks following the review of the business and strategy by the Leadership team and the risks have been amended to reflect the future operations of the business.
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 has 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 33 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.
Organising Kingfisher as a more unified company with a common customer offer rather than a collection of individual businesses fails to deliver the anticipated benefits.
- Our investments fail to deliver value to the Group, especially our investment in the IT strategy programme.
- We fail to deliver the benefits of a more unified and unique offer and standardised activities and processes.
- We fail to create enough innovation opportunities.
- We fail to identify and maximise potential cost reductions and efficiency savings.
- Our investments in new store formats, customer markets and customer proposition strategies fail to stimulate increased consumer spend and do not deliver the desired sales growth in our mature markets.
- Uncertainty surrounding the resilience of the global economy and increased geo-political volatility, particularly in Russia, may impact both consumer confidence and the long-term sustainability and capabilities of our supplier base.
- We do not make the necessary investment in our people to ensure that we have the appropriate capacity, skills and experience.
- We fail to deliver our sustainability targets due to not integrating our sustainability plan into the day to day operations of the business.
- 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.
- 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 & Safety management systems.
- Kingfisher’s reputation and brand are affected by 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.