John Lewis Partnership Annual Report and Accounts 2015

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John Lewis Partnership plc Annual Report and Accounts 2015

Managing our

Partnership risks

EFFECTIVE RISK MANAGEMENT IS SIMPLY ABOUT GOOD MANAGEMENT. IT HELPS US MAINTAIN PARTNERS’ TRUST AND BUILD VALUE FOR THE PARTNERSHIP.

Loraine Woodhouse Acting Group Finance Director

How do we define risk?

We define risk as ‘anything that can adversely affect our ability to meet the Partnership’s objectives, protect its reputation and comply with regulatory standards’.

Our approach to risk

Risk is not something that we can avoid. It is an inherent part of how the Partnership seeks to grow and create value. In the pursuit of our Partnership Aims, strategy and business plan objectives, we seek to understand and harness risks, but operate within an acceptable level of risk taking – our perceived ‘risk tolerance’ in accordance with parameters set by our Constitution and the Board.

All Partners should strive to be aware of risks in their area of responsibility and manage those risks intelligently in their day-to- day activities.

Risks or opportunities?

Risks can come in different forms, some arising from challenges from the external environment in which we compete, but others internally from uncertainties and issues with our strategic responses and how we operate our business model. Some may threaten our success or viability directly with a financial, operational and/or reputational impact; others could be opportunities we might miss for further growth and a sustainable future. By understanding our risks more clearly and managing them more pro- actively we should be in a better position to build future value and achieve Principle 1.

ASSESSING RISK TOLERANCES

D A PRACTICAL APPROACH

ACTIONING AND MONITORING RISKS

BUSINESS PLANNING AND REVIEW PROCESS

EVALUATING RISKS AND CONTROLS

C

AS PART OF OUR STRATEGIC,

E

UNDERSTANDING THE CONTEXT

IDENTIFYING RISKS

B A

Our risk management process

To improve our ability to consistently identify, manage and monitor risks, and take advantage of opportunities, we have developed a structured approach to assessing, managing and communicating risk.

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