Risk management

Identifying and mitigating risk

Risk management enables us to identify, measure and manage events that could threaten the sustainability of our business.

It also helps us to identify opportunities to strengthen the business and respond to market trends and public opinion.

Effective risk management enables us to:

• Anticipate trends that may threaten our assets, revenue, brand, reputation or shareholder value.
• Assess our appetite for new and existing risks and develop strategies to mitigate them.
• Protect our resources and revenue.
• Develop a culture of risk management among our employees.
• Assure our compliance with our risk management policy.
• Turn risks into valuable business opportunities.

We support the disclosure guidelines on social responsibility set out by the Association of British Insurers (ABI). These help us to manage our social, ethical and environmental risks. During the year the Board and Executive Committee were briefed on a range of issues, notably climate change, environmental management and carbon emissions, child protection, health, privacy and data protection.

Executive Directors are responsible for managing the risks across their local O2 businesses and during 2006 they reported every six months to the O2 Board. Their pay and reward is linked to the achievement of key performance targets such as customer satisfaction and employee engagement.

Social, environmental and ethical issues are ‘championed’ by individual Directors (see table below). Each champion reports regularly to the Board, enabling us to treat these issues as inherent risks to the business.

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