John Lewis Partnership plc Annual Report and Accounts 2014


47


Identifying and monitoring


key Partnership risks We have a formal risk identification process, which includes a rigorous analysis of internal and external risks at both a Divisional Board and Partnership Board level.


As part of its annual business planning process, each division identifies key risks that could threaten the successful delivery of its short and longer-term business plans. The risk review is holistic and considers:


– Risks collated from the Partnership’s Enterprise Risk Management System;


– A detailed analysis of internal operational and business risks;


– External market factors (such as economic updates, competitor monitoring and regulatory trends);


– Actions required to manage these risks within the agreed risk tolerance; and


– Self-certification of risk assessment and mitigation at Divisional Board level.


 Internal and external risk factors


Partnership’s enterprise risk management system


Divisional key risk identification Process review and controls Audit and Risk Committee reviews the risk identification processes Self-certification of risk assessment and mitigations Internal Audit review of internal controls and business risks


Divisional Risk Committee review


Divisional


Board review Quarterly Risk Review


Chairman’s Committee review


Audit and Risk Committee and Board Review


Partnership key risk identification


The Chairman’s Committee, supported by the Head of Internal Audit and Risk Management, reviews the divisional risk analysis, using additional information as required, to:


– Identify and agree the key risks to the Partnership strategy;


– Agree the ownership of each of these risks (typically a member of the Chairman’s Committee);


– Determine whether the controls and management plan for each risk are adequate and within the Partnership’s agreed risk tolerance; and


– Review the process for monitoring each of these risks.


Following the Chairman’s Committee review, and a review of the risk identification processes by the Audit and Risk Committee, an updated Partnership risk profile is presented to the Partnership Board for discussion and debate in order to agree the key risks faced by the Partnership. The risks are reviewed by the Partnership’s Insurance department to assess whether there is any further scope and appetite for insuring those risks. See page 48 for an overview of the Partnership’s principal risks and key mitigations.


Key risks and mitigations are reviewed quarterly by each Divisional Risk Committee and the Audit and Risk Committee and annually by the Partnership Board. An Internal Audit review is also undertaken to test internal controls and business risks using a risk-based audit plan.


THE JOHN LEWIS PARTNERSHIP


OUR PERFORMANCE


GOVERNANCE


FINANCIAL STATEMENTS


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