48. Risk managem
"If you risk nothing,
then you risk everything"
The worldwide external audit activities - which
are based on local statutory requirements, and
therefore more detailed than necessary for the
audit of the Heineken N.V. consolidated figures -
provide additional assurance on fair presentation
of financial reporting on operating company level.
External auditors also report on internal control
issues through their management letters and
attend local and regional Assurance Meetings.
Considering Heineken's risk management and
control system described in this section, the
financial reporting is adequately designed and
worked effectively in the year under review in
providing reasonable assurance that the 2005
financial statements do not contain any material
inaccuracies. This statement cannot be construed
as a statement in accordance with the requirements
of Section 404 of the US Sarbanes-Oxley Act,
which is not applicable to Heineken N.V.
Main risks
Under the explicit understanding that this is
not an exhaustive list, Heineken's major strategic,
operational, financial and regulatory risks are
described below, including the risk mitigation
measures in place or planned enhancements.
Strategic risks
Heineken brand perception and Company reputation
As both the Group and its most valuable brand
carry the same name, reputation management
is of utmost importance. Heineken enjoys a
positive corporate reputation and our operating
companies are well respected in their region.
Constant management attention is directed
towards enhancing Heineken's social,
environmental and financial reputation.
The Heineken brand is key to Heineken's growth
strategy and is the most valuable asset of
the Company. Anything that adversely affects
consumer and stakeholder confidence in
the Heineken brand or Company could have
a negative impact on the overall business.
The Company reputation and sales could be
damaged by product integrity issues. Therefore,
production and logistics are subject to rigorous
quality standards and monitoring procedures,
to be further strengthened in 2006. Brand
perception is managed by strict marketing control
procedures. A Code of Business Conduct and
Whistleblowing Procedure have been implemented,
which aim to prevent any unethical and
irresponsible behaviour by the Company
or its employees.
Geena Davis
Heineken N.V. - Annual Report 2005
