Arla Foods Annual Report 2020
Management Review Our Strategy
Our Brands and Commercial Segments Our Responsibility Our Governance
Our Performance Review Our Consolidated Financial Statements
Our Consolidated Environmental, Social and Governance Data
RISK AND COMPLIANCE
MANAGEMENT
As a cooperative with cross-country ownership and global activities Arla faces multiple risks and uncertainties that may
threat our business and our ability to pay a competitive milk price to our owners. Steering through 2020 with the impacts
of Covid-19 and the threat of a hard Brexit exemplifies why strong risk and compliance management is important.
Arla's risk and compliance management aims to
reduce uncertainties, mitigate adverse internal and
external impacts, capture business opportunities
to maximise value creation, and to ensure a
compliant business conduct. We take measures to
identify, understand, assess and deal with risks
effectively. Our focus is on risks that may threat
the realisation of our strategy, and we also address
risks inherent in the business processes of the
company.
Risk management
The Board of Directors has the overall responsibility
for overseeing risk and for maintaining robust risk
and compliance management as well as an
internal control system. The Board of Directors
recognises the importance of identifying and
actively monitoring the most persistent risks, as
well as long-term threats, trends, or challenges
facing the Group. The most significant risks are
regularly reviewed and assessed by the Executive
Management Team and the Board of Directors,
who are also responsible for reviewing the
effectiveness of the risk and compliance
management and internal control processes
throughout the year. Generally, our risk and
compliance activities are monitored and
discussed quarterly by the Executive Manage-
ment Team and annually by the Board
of Directors.
In 2020, the Board of Directors monitored and
discussed the impacts of Covid-19 on a frequent
basis, focusing on business continuity and the
health and safety of our employees. The continued
risk of a hard Brexit and the effect of Brexit-related
friction costs were monitored closely by the Board
of Directors, and relevant members of the Board
were also engaged in dialogue with representatives
from both the EU and the UK government. Internally,
a dedicated task force team consisting of specialists
from relevant parts of Arla worked intensively
managing the Covid-19 situation and preparing
for Brexit.
Risk identification
We identify compliance risks using several
methods, including monitoring of regulatory
developments, investigations upon alleged
misconduct reports, compliance training, internal
compliance reviews and process risk mapping, as
well as CSR due diligence.
Policy framework
We continuously work on improving our corporate
policies to reflect our values and commitments as
stated in our Code of Conduct. Our policies govern
general employee behaviour in key areas of good
business conduct, guide us to act responsibly and
with integrity, and govern our ways of working as
ONE aligned and efficient Arla.
Controls
We have zero tolerance towards violation of
principles set by our policies and secure this
through a coherent system of internal controls,
which are regularly assessed for effectiveness and
adequacy. We continue to develop our internal
control environment with system-embedded
controls as well as monitoring of our procedures to
avoid negligence and misconduct across business
processes. As a part of the control scheme, we
also develop data privacy control points,
subject to regular monitoring and review.
In 2020, we continued to build a
compliant culture. In 2019, we
focused on enhancing controls
and policies in our sales and
purchasing processes. We also
progressed in utilising
analytics and robotic
process automation to
strengthen our
compliance.
49 ARLA FOODS ANNUAL REPORT 2020
Code
of Conduct
Policies
Processes, procedures
and standards
Guidelines and instructions
Our governance frameworkView entire presentation