46. Risk management
Managing risks is explicitly on the agenda of the management in order
to protect the business from the effects of disasters, failures and reputational
damage. Continuity and sustainability of the business is as important to
stakeholders as growing and operating it.
"A life without adventure is
likely to be unsatisfying, but
a life in which adventure is
allowed to take whatever form
it will is likely to be short."
Risk management and control system
The Heineken risk management and control
systems are aimed at a reasonable level of
assurance, that the risks of the Company are
identified and managed and that the operational
and financial objectives are met, in compliance
with applicable iaws and regulations. A system
of controls to ensure adequate financial reporting
is included. Heineken's internal control system
is based on the COSO Internal Control Framework.
Risk profile
Heineken is a single-product Company, with a
high level of commonality in its worldwide business
operations spread over many mature and emerging
markets. The worldwide activities are exposed
to varying degrees of risk and uncertainty, some
of which, if not identified and managed, may
result in a material impact on a particular
operating company, but may not materially affect
the Group as a whole.
Risk management
Doing business inherently involves taking risks,
and by managing these risks Heineken strives to
be a sustainable and performance-driven company.
Structured business risk assessments are part of
Heineken's business planning and control process.
Operational risks are mainly managed through
the embedding of Key Business Controls based
on Heineken common processes and systems.
The risk management and control systems are
considered to be in balance with Heineken's risk
profile, although such systems can never provide
absolute assurance. Following Heineken's
continuing growth and changing risk profile, the
Company's risk management and control systems
are subject to continuous review and adaptations.
Responsibilities
The Executive Board, under the supervision of
the Supervisory Board, is responsible overall for
Heineken's risk management and control systems.
Regional and operating company management are
responsible for managing performance, underlying
risks and effectiveness of operations, within the
rules set by the Executive Board, supported and
supervised by Group departments.
Business planning and performance monitoring
The main pillar of Heineken's internal
governance activities is the business planning
and performance monitoring process. Operating
company's strategy, business plan and quarterly
performance are discussed with Regional
Management. Regional performance is discussed
with the Executive Board. The approved business
plans include clear objectives, performance
indicators and target setting, which provide the
basis for monitoring performance compared to
plan. In 2005, a new performance management
model was implemented.
Bertrand Russell
Heineken N.V. - Annual Report 2005