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

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