Principal risks and uncertainties continued
Principal risks and uncertainties The Group continues to operate in a particularly dynamic and evolving marketplace. The current 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 climate change (10b) has been added for FY22 and reflects the importance being placed on the risks and opportunities in relation to climate change and related regulation on the financial performance of NCC Group. The principal risks and uncertainties are categorised into three categories, strategic, operational and environmental, social and governance (ESG), that represent risks relating to the Group’s business strategy, various operational risks of managing the business and various ESG/climate change risks. The heat map provides a pictorial representation of the Group’s 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 2022.
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 Mike Maddison, Chief Executive Officer
Risk movement/impact Setting of strategy remains important to Group growth.
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. Risk movement/impact The Group continues to deliver projects and initiatives. Process details remain as previously stated.
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 Mike Maddison, Chief Executive Officer
Operational
3. Global pandemic – Covid-19
Link to strategy:
Support growth
Develop our people
Lead the market
Key controls and mitigating factors During FY22, our colleagues have continued to work successfully from home, delivering remote client services, and have maintained hybrid working practices for the remainder of the year.
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. Risk movement/impact Demonstrable track record of successful remote working for both back-office functions and client delivery. Lifting of many of the restrictions that were put in place in relation to Covid-19.
NCC Group has a number of features which give the Group a 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.
Accountable Executive Tim Kowalski, Chief Financial Officer
Risk movement:
Risk impact:
Increased
Decreased
Unchanged
High
Medium Low
Viability risk: VR New risk: NR
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NCC Group plc — Annual report and accounts for the year ended 31 May 2022
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