Principal risks and uncertainties continued
Principal risks and uncertainties The Group continues to operate in a particularly dynamic and evolving marketplace. The current strategic risk register has been developed to reflect those factors and includes those risks that would threaten its business model, future performance, solvency or liquidity. Detailed descriptions of the current principal risks and uncertainties faced by the Group, their potential impact and mitigating processes and controls are set out below. A risk related to sustainability (10) has been added to the strategic risks for FY21 and reflects the importance being placed on a sustainable business strategy by NCC Group and its investors. The heat map provides a pictorial representation of the Group’s strategic risks and their direction of travel.
Strategic
VR
1. Business strategy
Link to strategy:
Lead the market
Win business
Deliver excellence
Support growth
Develop our people
Key controls and mitigating factors Members of the Board have significant experience in evolving business strategies. The Board is significantly engaged in both setting and reviewing strategy and held a dedicated strategy session in March 2021.
Impact A poor strategy or ineffective execution of a strategy could have a material negative impact on the Group’s financial performance and value. It would potentially weaken the Group compared to its competitors and risk the Group’s established position in the marketplace.
A comprehensive business strategy is essential to the continued success of the Group as we strive to maximise shareholder value.
Accountable Executive Adam Palser, Chief Executive Officer
Risk movement/impact
2. Management of strategic change
Link to strategy:
Win business
Support growth
Develop our people
Key controls and mitigating factors The Group has established a strategic change management capability and this includes access to programme management professionals and the deployment of associated change management processes, for example the operation of senior change oversight committees.
Impact Poor change management could lead to ineffective implementation of projects that then cost more to deliver, take longer to deliver and result in fewer benefits being realised (or all three). Poor delivery of change could ultimately impair business performance.
As the Group adapts and executes its strategy there are a number of complex projects and initiatives that not only need to be delivered but also require understanding and support from all colleagues.
Accountable Executive Adam Palser, Chief Executive Officer
Risk movement/impact
Operational
3. Global pandemic – Covid-19
Link to strategy:
Support growth
Develop our people
Lead the market
Key controls and mitigating factors During 2021, we successfully moved to remote working during the lockdown periods across our offices and were able to deliver our services off client sites. We have also used remote working as an opportunity to develop our services to support remote delivery. In addition, the Group has developed an office re-opening programme, which has taken into account the health and wellbeing of our colleagues, which has further supported our successful service delivery.
Impact The potential impact of a pandemic globally is closed offices, people who are unwell and unable to work for periods of time and a slow-down in business from our clients.
NCC Group has a number of features which give the Group greater resilience in the face of a global pandemic. Failure to prepare for this may cause disruption and uncertainty to our business, as well as risk the health and safety of our people. Any disruption or uncertainty could have an adverse effect on our business, financial results and operations.
Risk movement/impact
Accountable Executive Tim Kowalski, Chief Financial Officer
Risk movement:
Risk impact:
Decreased
Unchanged
High
Medium Low
Increased
Viability risk: VR New risk: NR
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NCC Group plc — Annual report and accounts for the year ended 31 May 2021
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