In our 2021 Annual Report, Lindsay Beardsell, our Executive Vice President, General Counsel talks about how the pandemic has focused people’s minds on risk and how local teams have taken ownership of risks in their own areas.
Responding to Covid-19
There’s no doubt that the biggest risk we’ve faced this year – as for everyone – has been keeping our people safe amidst a global pandemic, while supporting the food supply chain by keeping our operations running and serving our customers. Our approach to managing Covid-19 reflects our approach to risk more broadly, namely that we consider things in the round, guided, as always, by our purpose of Improving Lives for Generations. Risk management can often feel very compliance-driven but a true understanding of risk is a human experience, because it’s about how people behave and why.
This wider consideration of our people and their individual circumstances came to the fore this year like never before, with the almost overnight transition to working from home for office-based staff, the need for new safe-working protocols at our plants and in our labs, and the need to find new ways to interact with and support our customers.
All of this while people were dealing with their own unique challenges at home. With the pandemic manifesting itself differently in every location, we had to delegate decisions far more to our teams on the ground, under the umbrella of risk-based principles set at global level by the Global Pandemic Response team.
Last year, we said we wanted to be more agile and quick to respond – and this year has certainly proved that we can be.
A creative approach to managing risk during Covid-19
Housekeeping is an important element of risk management – risks that are well known and similar in all companies, but nonetheless need proper management, checking and auditing. In our focus on Covid-19, we didn’t lose sight of this important work.
We’ve had to be creative about how we carried out risk assessments, compliance checks and audits, bringing in local people where restrictions allowed, and carrying out online ‘visits’ where work could be done that way. It showed us that we can continue business as usual, even when circumstances are far from it. In some cases, we’ve even benefited because it’s been much easier to get a wider group of people ‘in a room’ together, leading to deeper and more productive conversations around risk.
Despite the challenges of Covid-19 we delivered the risk programme we planned at the start of the year. We completed the risk assessment work for our new supplier audit programme, part of which will involve supplier audits being undertaken by SEDEX, a not-for-profit organisation that enables suppliers to share audits with their customers.
We trained our distributors on our Code of Ethics and carried out a detailed Climate Change Risk Assessment with the support of an external party. We also carried out due diligence work on our two acquisitions, Sweet Green Fields in China and Chaodee Modified Starch Co., Ltd. in Thailand. Restrictions on travel due to Covid-19 made this work more challenging, but no less necessary, and it has been encouraging to see the openness of both businesses about the risks and opportunities they face.
During the year, we implemented a new, more automated enterprise risk management system which will significantly enhance how we manage risk and make it easier for our local teams to identify risk and monitor mitigating actions.
Our focus for the year ahead
One positive outcome of the pandemic is that it has led us to engage more actively around the business on strategic risk. Another, which is critical for our future, is how our local teams have really stepped up and owned risk in their own areas, and seen how they can benefit from doing so.
The main task for the coming year is less about process, and more about helping our people keep going amidst continuing uncertainty and to continue to embed a risk mindset in everything we do.
Our approach to risk
Each year, we hold bottom-up and top-down reviews of our principal risks, namely those that could threaten our business model, strategy, performance, solvency or liquidity, looking at a three-year horizon. The bottom-up process involves a rolling programme of workshops held around the business, facilitated by our risk team. These workshops help us to identify current and potential risks, which we then collate and report through functional and divisional levels to our Risk Committee and Executive Committee. We also consider any areas and behaviours which could bring about new risks, and different combinations of risk with other potentially larger impacts.
Through these processes, we identify our main business, strategic, financial, operational and compliance risks and create action plans and controls to mitigate them to the extent appropriate to our risk appetite.
The top-down review involves the Board assessing the output of this work, confirming that our principal risks have been captured and addressed, and that emerging risks have been considered. Our risk profile does of course evolve, and the Board updates its view of principal risks accordingly. In the 2020 financial year, the Board decided to add a new principal risk in relation to external disruptive forces that might materially impact our business.
These could include the impact of climate change and of diseases such as the current Covid-19 pandemic. This has received further review over the last 12 months, and will remain on our principal risk register moving forward. Therefore, no changes were made to our principal risks during the year.
Our Risk Committee reviews our principal risks regularly – at least every quarter – and reports to the Board any changes in the level or velocity of the risks, and the associated mitigating actions.
Our Board reviews the principal risks at least every six months.
Find out what else we’ve been up to over the past year in our Annual Report 2021 hub
Download a copy of the Annual Report 2021 below