Risk Management continued
Reportofthe Reportofthe Financial Other
Contents Overview Executive Board Supervisory Board Statements Information
Operational risks continued
Risk description
Product safety and integrity
HEINEKEN is committed to achieving the highest standards for
integrity and safety of its products. Poor quality of any of its products
may result in health hazards, reputational damage, lower volumes
and financial liabilities.
Specific risks include:
Accidental or malicious contamination
Insufficient quality of products
Cost of recalls
Risk Management
Global production standards and governance,
product Quality Assurance
Recall and crisis procedures
Global production material standards and governance
Global and local supplier governance, including periodic
suppliers review
Company-wide sustainability programme covering suppliers risk,
production material risk and country risk
Information security
HEINEKEN's business relies heavily on its IT infrastructure. Failure of
its IT system or a breach in the security infrastructure may lead to
business disruption, loss of confidential information, financial and
reputational damage.
Specific risks include:
Disruption of processes outsourced to shared service centres
Unauthorised access Security breaches/ Cyber crime
Reliability of key IT suppliers
Strengthened information security policy
Implementation and testing of continuity measures with our
outsourcing partners
Implementation of measures to secure confidentiality and integrity
of data
Back-up of core operating data with separate contingency systems
Increased centralisation of IT systems allowing central enforcement
of security measures
Social media
Having a strong online presence and developing the opportunities
offered by social media involves new challenges and risks. HEINEKEN
may not be able to control information or respond in a timely manner
to threats to the Company's reputation, which could materially affect
its brand equity and income-generating capacity.
Specific risks include:
Rapid and large-scale spread of damaging claims or comments
about HEINEKEN among social media users
Use of fake HEINEKEN accounts to spread misinformation
about the Company or its products
Effective use of social media and consumer and marketing intelligence
Monitoring of social media platforms by various departments
(Marketing, Corporate Relations, Legal Affairs) and monitoring
response systems including dedicated digital dashboard
Execution and change management
In the last years, HEINEKEN has engaged in several significant
business improvement projects. The large number of operating
companies and their varying level of integration represent a specific
challenge to these projects. These strategic transformation
programmes may not deliver the expected benefits or may incur
significant cost or time overruns.
Specific risks include:
Lower than expected benefits
Ineffective or inefficient programme execution affecting supply
chain, wholesale business, support functions, quality standards,
business plans and synergies
Selection and prioritisation of business improvement projects
Involvement of top management in all major projects
Planning of projects and monitoring of third party providers,
project costs and benefits
Consistent and effective project and programme portfolio
governance organisation
26 Heineken N.V. Annual Report 2015
