Risk management Managing risks is explicitly on the agenda of 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 the stakeholders as growing and operating it. 42 Report of the Executive Board Risk management and control system The Heineken risk management and control systems aim to ensure 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 laws and regulations. A system of controls to ensure adequate financial reporting is included. Heineken's internal control system is based on the C0S0 Internal Control Framework. Risk appetite The Company is recognised by its drive for quality, consistency and financial discipline. Entrepreneurial spirit is encouraged across the Group to seek opportunities supporting continuous growth (like business development and innovation), whilst taking controlled risks. 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 risk assessments are part of, amongst others, Heineken's Company-change programmes, business planning and performance- monitoring process, common process and system implementations, acquisitions and business integration activities. 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, has overall responsibility 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. Heineken Company Rules In the year under review, the governance process of the Heineken Company Rules has been further structured. Also, compliance monitoring by Group departments has been further strengthened. From 2007, local management has been requested to sign a so-called 'Assurance Letter' to confirm compliance with Company Rules in addition to compliance with certain matters with regard to financial reporting. Business planning and performance monitoring The main pillar of Heineken's internal governance activities is the business planning and performance monitoring process. Operating companies' strategies, business plans, key risks 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 business plan. These plans also contain an annual assessment of the main risks (including mitigation plans) and financial sensitivities. In 2007, Heineken started a Company-wide programme to create a more integrated management nformation environment for reporting to Regions and Group. Internal control in operating companies Heineken is progressing the Group-wide development and implementation of best practice processes supported by common IT systems. At the end of 2007, 69 per cent of Heineken's Heineken N.V. Annual Report 2007

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