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REPORTS OF THE BOARD OF DIRECTORS
8
REPORT BY THE CHAIRMAN OF THE BOARD OF DIRECTORS
carried out using check-lists and enable the following areas to be
dealt with:
●
recognition of revenue in line with the financial progress of the
contract;
●
margin on completion;
●
contractual risks and related reserves and provisions;
●
cash flows.
Each business unit also carries out monthly project reviews, which cover
the vast majority of ongoing projects.
The executive management team, the Operations Departments and the
Human Resources Departments are responsible for assessing employee-
related risks. These risks mainly stem from the high levels of staff turnover
that are a characteristic feature of the engineering and consultancy
industries.
A member of the executive management team is in charge of developing
human resources within the Group. Working closely with all the relevant
parties, he defines the key aspects of the Group’s human resources
policy and the main priorities of annual recruitment campaigns. The
various human resources teams also work closely together in order to
effectively manage the risks relating to periods between contracts and
the transfer of skills from one sector to another.
Because the Group has a diversified client base and works in different
business sectors it is able to satisfactorily balance the risks relating
to the markets in which it operates. The executive management team
meets regularly to discuss any actual or potential changes in the Group’s
economic and commercial environment and determine any measures
that need to be put in place as a result of such changes.
Management and operational IT systems are vital for the Group to carry
out its activities In order to effectively deal with the risks relating to these
systems, the Group has established a series of procedures intended
to guarantee the security of systems and information as well as data
integrity and the continuity of operations. These key procedures include
a business continuity plan.
The risk mapping procedure implemented by the Group covers the
different categories of major risks to which the Group is exposed
and measures these risks in terms of impact and vulnerability (
i.e.
net exposure to risks after taking existing controls and risk reduction
measures into account).
Assystem has opted for a “top-down” approach to allow the Group’s
management to obtain an overall view of the risks to which the Group
is exposed. This overall view emerges as a result of discussions with
members of the executive management team and with Assystem’s key
operations and corporate support managers. The discussions are based
on an inventory of the main risk factors and an assessment of their
potential impact and probability of occurrence, and they cover the
following main themes:
●
business/operations;
●
contract and project management;
●
HR/people and skills management;
●
finance;
●
legal and fiscal compliance;
●
results and performance;
●
image and reputation.
For each of the above categories, the main risks have been identified,
defined and assessed in terms of their impact and probability of
occurrence.
The criteria used to assess the impact of identified risks and the
probability of their occurrence are described below.
Impact
For risks whose consequences can be measured in monetary terms, their
impact on consolidated operating profit is determined in accordance
with the following scale.
Magnitude
Monetary impact on operating profit
Very low
Less than €1m
Low
Between €1m and €3m
Medium
Between €3m and €5m
High
Between €5m and €8m
Very high
Over €8m
The consequences of risks that affect the Group’s image and reputation
cannot be measured in monetary terms and are therefore assessed
based on potential fallout in terms of media coverage and/or crisis
management.
Magnitude
Non-monetary impact in terms of media coverage
and/or crisis management
Very low
No specific media coverage
Low
Local media coverage; crisis unit limited
to local managers
Medium
Regional media coverage; crisis unit involving local
managers and BU/divisional directors
High
National media coverage; crisis unit involving
the Group’s management bodies
Very high
International media coverage; crisis unit involving
the Group’s management bodies and direct
referral to the Board of Directors
Probability
The probability of risks occurring is measured by reference to the past
occurrence of comparable and/or similar events, according to the
following scale:
Extent
Occurrence of comparable/similar
events in the past
Improbable (less than 5%)
Never occurred in the past 5 years
Unlikely (between 5% and 15%)
Occurred once or twice
in the past 5 years
Possible (between 15% and 30%)
Occurred once a year
in the past 5 years
Very possible (between 30% and 90%)
Occurred more than once a year
in the past 5 years
Certain (over 90%)
The risk is the result of non-compliance
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REGISTRATION DOCUMENT
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