Investor Presentaiton
HOW WE MANAGE RISK
BOOHOO GROUP PLC
ANNUAL REPORT AND ACCOUNTS 2021
/ STRATEGIC REPORT
RISK MANAGEMENT
The board has overall responsibility for risk
management, validating the appropriateness
of the supporting system of internal controls
and for reviewing their effectiveness.
Effective risk management is an evolving and
continuous process; our aim is to intrinsically
embed effective risk management throughout
the business in order to manage risk in a way
that helps the group achieve its objectives.
During the last financial year, there have been
considerable ongoing improvements to the
risk management framework at boohoo and
the way we manage risk. This includes:
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The introduction of a new risk management
policy, approved by the board;
The establishment of risk-focused
governance structures;
The provision of risk management training
to senior executives;
The introduction of the assessment of risk
appetite at board level; and
Additional resourcing within the internal
audit and risk team.
RISK GOVERNANCE
The group has established an Executive Risk Group and Risk Committee to oversee and
monitor the improvements being made in relation to risk management. Below this level, we have
established functional risk groups across the business to identify, assess, monitor and manage
risks held at a functional level.
Strategic risk reporting
PLC Board
Twice yearly monitoring of STRATEGIC RISK
Risk appetite
Risk Committee
Quarterly monitoring of STRATEGIC RISK
Strategic risk reporting
Executive Risk Management Group
Quarterly monitoring of STRATEGIC RISK
and escalated FUNCTIONAL RISK
Functional risk reporting
Executive Focus Groups
At least quarterly monitoring
of FUNCTIONAL RISK
Functional risk reporting
Risk owners
Continuous identification and
management of FUNCTIONAL RISK
OUR RISK MANAGEMENT APPROACH
Identify - Top down and bottom up identification methods including workshops, interviews
and focus groups
Assess Prioritisation and measurement of risks using consistent risk assessment methods
and against risk appetites agreed with the board
Manage Identifying, improving and reviewing control measures that reduce risk impact or
likelihood
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Monitor Monitoring and reporting on the status of risks
At a functional level, each business function is responsible for preparing and maintaining their
functional risk registers and, with the assistance of the risk team, identifying, assessing, managing
and monitoring risks and reviewing emerging risks within their function. Each risk is assigned an
owner, through which ongoing activities and any actions related to that risk are updated.
At strategic level, the Executive Risk Group oversees the monitoring of escalated functional risks
as well as key strategic risks to the group. The board, assisted by the Risk Committee, reviews
the strategic risks facing the group and assesses the mitigating factors, reviews emerging risks,
performs deep dives on key risks, and assists the board in setting the risk appetite of the group,
against which risks are evaluated. Each risk is assigned to a senior executive, through which
ongoing activities and any actions related to that risk are updated.
Both functional and strategic risk registers are prepared using consistent risk factors and evaluate
business impact and likelihood ratings, both before (inherent) and after (residual) the effect of
any mitigating activities or controls.
Our risk management process is an ongoing assessment of the key risks facing our business, such
that it is updated whenever there is a major change in the principal risks and uncertainties.
The following are considered to be the principal risks and uncertainties as at the year-end.
STRATEGIC RISKS
Risk factors
Risk owner
SUPPLY CHAIN ETHICS
Director of Responsible Sourcing & Group Product Operations
As a result of complexity inherent within the supply chain, there is
a risk that inappropriate, unethical and illegal non-compliance with
required supply chain practices go undetected, which could lead to
investigations from regulatory bodies and may cause reputational
damage.
COMPETITION RISK
CEO and CFO
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many
The business operates in a broad and open market, with
competitors. There are many factors that influence customers'
choice, including service, fashion, price and brand. As a result of the
above factors, there is a risk that market share may not grow or could
decline
European customers may be deterred from purchasing from a UK
company following the UK's decision to leave the EU
SUSTAINABILITY
Director of Responsible Sourcing & Group Product Operations
As a result of sustainability and environmental factors, there is a risk
that customer perception is damaged, which could negatively impact
the brand
Longer term, consumers may reduce consumption of fast fashion
due to environmental concerns
GOVERNANCE
CFO
As a result of governance issues there is a risk of the business not
meeting the best interests of its stakeholders
Mitigation
Agenda for Change outputs defining current and future policy,
with actions rigorously monitored and reported
Establishing the right structure and team by building out the
sourcing and ethical compliance team, across the UK and regional
offices
Mapping the supply chain ready for reporting in 2021
(March/September)
Scheduling regular audits against boohoo code of conduct
• Transparency systems and tools are in place for UK (Leicester)
manufacturing
Creating a series of behaviours which align with boohoo values
Operating a differentiated business model, across brand and
geographies insulates against specific brand competitors as a group
• Investment in brands, both at an individual level and through
acquisition
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• Competitor activity and offerings are reviewed regularly to
remain abreast of market developments and identify competitive
advantages
Consumers' changing preferences are monitored internally and by
market research to ensure product and service is relevant to demand
Developments in e-commerce trends are monitored to keep abreast
of the latest developments and innovations
Performance targets control key deliverables (product quality,
customer service and traffic)
A defined supplier framework and governance structure,
which outlines the relationship owners, exists
Supplier security assessments are conducted
Diversification of the service providers, where appropriate
to spread risk
Sustainable change is being driven by Agenda for Change
and embedded within business practices
Governance is a constant board agenda item
New non-executive directors have been recruited,
which improves governance
New committee structure established
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