tiï O Q,
A business integrated approach to managing our risks - HEINEKEN manages
the main opportunities and risks arising from its strategy and its daily operations.
HEINEKEN business framework
We are HEINEKEN
Introductio^^^^^^^^^^H Report of the Executive Board^^^^^l Report of the Supervisory Board
At HEINEKEN, risk management is an integral
part of doing business and is supported by clear
governance. Risks are an essential element when
opportunities are assessed and strategies set.
Management decisions are made in line with
HEINEKEN's risk appetite. Risks are identified,
mitigated and monitored on an ongoing basis,
as part of business routines.
HEINEKEN has established risk management
as the system of managing the risks that the
Company inevitably faces in achieving its strategy.
Through managing our risks in a conscious manner,
we increase the likelihood that our strategy and
business objectives are achieved.
Our proactive approach ensures risk management is
part of our executive conversations and is embedded
in our processes. It benefits our decision-making and
is essential to create and preserve long-term value.
HEINEKEN is predominantly a single-product
business, operating throughout the world in the
alcohol industry. HEINEKEN is present in more than
70 countries, with a growing share of its revenues
originating from emerging markets.
An increasingly negative perception in society
towards alcohol could prompt legislators to
implement further restrictive measures such as
limitations on availability, advertising, sponsorships,
distribution and points of sale, and increased tax.
This may cause changes in consumption trends,
which could lead to a decrease in the brand equity
and sales 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 effective control, 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.
HEINEKEN's risk appetite is the result of its
wide geographical spread, prudent financial
management and commitment to long-term value
creation. Risks are taken consciously, assessing their
impact on HEINEKEN's objectives.
The level of risk HEINEKEN is willing to take depends
on the type of objective it impacts.
HEINEKEN invests in building and protecting the
value of the Company.
We aim to reduce the risks that could impact our
reputation to the furthest extent possible, accepting
that this may come at a cost.
HEINEKEN is keen on pursuing commercial
opportunities to deliver top line growth, accepting
uncertainties linked to its strategic choices and the
context of the individual markets in which it operates.
HEINEKEN makes the availability of its brands a
priority, accepting only minimal disruptions to its
operations. In addition, HEINEKEN is continuously
investing to make the organisation future-proof and
ensure the sustainability of the business.
Heineken N.V. Annual Report 2018
Financial Statements Sustainability Review Other Information
The HEINEKEN business framework articulates
the key elements that the Company relies on to
operate effectively and deliver long-term value
creation while protecting the Company's people,
assets and reputation.
HEINEKEN's vision, purpose and values, 'We are
HEINEKEN', underpin the Company's strategic
objectives, enabled by our organisational structure
Behaviours provide clear guidance to all
employees on how to act and foster a culture
of achievement, collaboration and growth,
underpinned by the Behaviours framework
that reflects the expected attitudes in decision
making. Risk Management is an ongoing
activity supporting achievement of our business
objectives, based on our Risk Assessment Cycle,
the HEINEKEN Code of Business Conduct and the
As part of the Risk Assessment Cycle, operating
companies and their Management Teams
review and update their risks on a continuous
basis throughout the year. The HEINEKEN Rules
articulate how we work and the standards to
which we commit. They are a key element for
managing the risks faced by our Company and
translate our objectives into clear instructions
on how to conduct our daily business. Our Code
of Business Conduct and its underlying policies
set out HEINEKEN's commitment to conducting
business with fairness, integrity and respect for the
law and our values.
HEINEKEN's systems of risk management and
internal control, which are based on the COSO
Enterprise Risk Management and Internal Control
Reference model, form a fundamental part of the
HEINEKEN Business Framework.
How we act
Our global priorities
How we govern internally
Code of Business
How we work
How we manage risks
How we behave
Laws and Regulations
Monitoring and Assurance
Standards and Procedures
Execution and change management