Risk Management
HEINEKEN
Contents
Overview
Report of the
Report ofthe
Financial
Other
Executive Board
Supervisory Board
statements
information
This section presents an overview of HEINEKEN's approach to risk management, the main features of HEINEKEN's internal control and risk
management systems and a description of the nature and extent of its exposure to risks.
Effective management of risks forms an integral part of how HEINEKEN operates as a business and is embedded in day-to-day operations.
Responsibility for identifying potential operational, strategic and external risks and for implementing fit-for-purpose responses lies primarily
with line management. Risk management priorities are defined by regional and functional management and endorsed by the Executive
Board, who bears ultimate responsibility for managing the main risks faced by the Company and for reviewing the adeguacy of HEINEKEN's
internal control system.
Risk profile
HEINEKEN is a predominantly single-product business, operating throughout the world in the alcohol industry. Taking risks is an inherent part
of entrepreneurial behaviour. A structured risk management process allows HEINEKEN to take risks in a managed and controlled manner.
The international spread of the country portfolio geographically and between mature and emerging markets, a robust balance sheet and
strong cash flow form the context based on which HEINEKEN determines its appetite to risk. When doing business, HEINEKEN looks to mitigate
operational and reporting risks to the maximum extent based on cost/reward considerations. Preventing regulatory breaches, protecting its
reputation and delivering the highest level of product guality have priority over any other business objective.
In recent years, there has been increased media, social and political criticism directed at the alcoholic beverage industry. An increasingly
negative perception in society towards alcohol could prompt legislators to implement restrictive measures such as limitations on availability,
advertising, sponsorships, distribution and points of sale and increased government tax, and may cause changes in consumption trends,
which could lead to a decrease in the brand eguity and sales of HEINEKEN's products. In addition, it could adversely affect HEINEKEN's
commercial freedom to operate and restrict the availability of HEINEKEN's products.
HEINEKEN has undertaken business activities with other market parties in the form of joint ventures and strategic partnerships. Where HEINEKEN
does not have the majority of the shares and voting rights, decisions taken by these entities may not be fully harmonised with HEINEKEN's
strategic objectives. Moreover, HEINEKEN may not be able to identify and manage risks to the same extent as in the rest of the Group.
Internal Control and Risk Management
HEINEKEN Business Framework
r
r
Values
What we stand for
Shaping our future
Our global priorities
One HEINEKEN
How we govern internally
1 r i
r i
r
Code of Business Conduct
How we behave
Rules
Mé How we work ^M
Risk Management
How we manage risks
Policies
Standards and Procedures
Monitoring and Assurance
People
Systems
Processes
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Heineken N.V. Annual Report 2014
