John Lewis Partnership plc annual report and accounts 2012
Directors’ report continued
Audit and Risk Committee (continued)
risks of business operations and for implementing and maintaining systems for managing those risks in an efficient and effective manner through the business planning process. The Committee monitors the development of policies and systems for identifying, evaluating and managing significant risk throughout the Group. It also monitors management’s actions to manage those risks and reports annually to the Board. The operating divisions, John Lewis,Waitrose and Partnership Services, and all corporate departments, include risk assessments as part of their business plans and quarterly reporting. A procedure is in place by which Partners may, in confidence, raise concerns about possible improprieties in matters of financial reporting or otherwise. The Partnership’s culture lends itself well to individuals being given and taking explicit responsibility for managing risk throughout the business.
Work Performed by the Committee
Apart from performing the routine tasks laid out in the Committee’s Terms of Reference, as summarised above, the Committee paid particular intention in its meetings to:
• Strengthening the risk management procedures, as part of a continuous improvement programme, in terms of responsibilities and authorities following a robust compliance risk identification, assessment and reporting analysis of significant risks faced by the Partnership;
• Reviewing the measures for mitigating risks through appropriate internal controls and assurances mechanisms and developing risk analysis processes and methodology throughout the business functions;
• Reviewing and following up with management on internal audit and other reports related to the major transformation programmes taking place across the Partnership in information systems, e-commerce including the security of card payment information, finance and personnel;
• Regular review of the effectiveness of whistleblowing arrangements;
• Reviewing and following up with management on the operational risks within the Partnership, in particular those relating to anti-bribery and corruption policy and procedures, data security, business continuity and disaster recovery, health and safety and various external threats. The Committee was mindful of the impending Olympic Games in 2012 and the pressures that these will bring.
Committee evaluation
As part of the Board’s evaluation process, the Audit and Risk Committee undertook a review of its own performance. The evaluation process did not identify any significant areas of concern. The Committee will also carry out a review in the coming year as part of the proposed Board evaluation process.
Compliance with the Groceries (Supply Chain Practices) Market Investigation Order 2009 (‘the Order’) and the Groceries Supply Code of Practice (‘GSCOP’).
The Order and GSCOP came into force on 4 February 2010. Waitrose implemented a number of measures to ensure compliance with the Order and GSCOP which included the appointment of a Code Compliance Officer and the implementation of comprehensive Partner training, including annual refresher programmes and new starter training. As part of Waitrose’s ongoing compliance with the Order and the GSCOP, Waitrose is required to submit a report detailing its compliance with GSCOP to the Audit and Risk Committee for approval and to the Office of Fair Trading. Waitrose has submitted a report to the Audit and Risk Committee for the period 4 February 2010 to 28 January 2012.
The Audit and Risk Committee, which met on 17 April 2012, has approved the Code Compliance Officer's report on Waitrose’s compliance since the Order and GSCOP came into force and was pleased to note that Waitrose has not been the subject of any supplier or supply chain disputes under the Order or GSCOP. In concluding that Waitrose was fully compliant with the Order and with GSCOP, the Audit and Risk Committee noted the significant resources that Waitrose had invested in IT systems, training, processes and documentation ensuring that its compliance programme would be consistent both with the requirements of the Order and GSCOP and reflects the John Lewis Partnership's commitment to its overarching principle of fairness that has always governed its relationships with suppliers.
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