AmazonScience/document-haystack

1Risk Management2Whilst our Board owns and oversees 3our ERM programme, risk management 4accountability and responsibility are 5embedded throughout our organisation:6 Our first line of sight to our risks is 7through our Colleagues, who have 8responsibility to manage day-to-day risks 9in their own areas, they have the insight 10to risk that comes from experience and 11knowledge. The ERM process engages 12with the first line in all four steps of 13the ERM process defined in Figure 1. 14The first line is guided by Group policies, 15procedures, control frameworks and 16risk appetite. Local management, and 17ultimately the Executive, ensure that risks 18are managed and carried out according 19to these frameworks.20 The second line of sight is provided by our 21advisory support teams who specialise 22in areas such as ERM, Compliance, 23Cyber Security, Legal and HSSE. 24These advisory support teams review 25the controls implemented by the first 26line and advise whether the controls are 27adequate, they form a holistic view of 28risk across the Group and capture and 29escalate risks that could fall through silos, 30supporting and encouraging foresight 31of risk. This risk foresight is captured by 32the ERM and management teams, who 33review each risk register and dashboard 34on a regular basis, culminating in review 35by the Group Risk Committee, which 36then escalates significant risks to other 37Committees and the Board to fulfill 38risk oversight. 39 The third line of sight is through 40independent Internal and external 41audit, who provide assurance over the 42effectiveness of critical controls, which 43is provided through internal audits, 44supplemented by reports from external 45assurance providers. We use this 46hindsight to adjust our controls in the light 47of audit recommendations. 48 Entain’s Group Code of Conduct and 49Whistleblowing Policies, in addition to 50our controls framework, are in place to 51promote and aid us to ‘Do what’s right’. 52Annually the Audit Committee reviews 53the adequacy and effectiveness of the 54Company’s policies, which sets our tone 55for desired risk culture. 562023 Key Achievements57Robust Governance58A key cornerstone towards robust 59governance was accomplished, including 60the deployment of a new risk policy, 61framework, governance forums, and 62assurance checks. We: 63 Completed the ERM management system 64design and approval 65 Began implementation of our ERM 66system through over 50 sessions of risk 67management training and workshops, 68with work ongoing into 2024 to 69implement in our Super Regions, giving a 70much clearer view of the company’s most 71significant risks.72 Reviewed and updated Entain’s risk 73scoring criteria, establishing new risk 74matrix covering ‘Impact vs Actions’ as 75a modern approach to ERM, ensuring 76focus on what can be done about the 77risk is embedded in our day-to-day risk 78management “bottom-up” process.79 Delivered new format risk registers, 80allowing the identification of key controls 81and monitoring of actions needed to put 82further controls in place.83 Delivered new Significant Risk 84Dashboards and presented to the 85risk oversight Committees and Board 86during the year, facilitating decisions 87on risk appetite, required actions and 88resource allocation.89Horizon scanning (emerging risks) 90We enhanced our process for identification, 91analysis, and evaluation of emerging 92risks, informed by functions, divisions, 93super-regions, subject matter experts 94and leadership, to provide a Group-wide 95view. In 2023, we undertook a series of 96workshops across our risk landscape 97to provide a deeper exploration of our 98emerging threats and opportunities and 99come to a consensus on our response. 100As such, the exercise to understand 101potential emerging risks has been carried 102out during each initial risk workshop, 103looking at risks that may occur over 3-, 5-, 104and 10-year time horizons. In analysing 105the data, common themes have become 106apparent, which have been developed 107to display and better understand the 108information regarding emerging risks.109Risk aware culture 110Our ERM team led the establishment and 111implementation of our refreshed approach 112to Enterprise Risk Management, which 113is aligned with the international risk 114standard ISO 31000. During 2023, we have 115progressed a consistent approach across 116our business through training, engagement, 117and application of our new ERM toolkit.118Our colleagues are fundamental to the 119success of risk management at Entain. 120A positive risk aware culture enables 121colleagues at all levels of our organisation 122to deliver risk management as an integral 123part of their day -to-day activities. We do 124this by:125 Developing a compelling narrative on the 126benefits of effective risk management 127across the Group.128 Delivering targeted foundation of risk 129management training.130 Undertaking specific risk workshops for 131each function and region, the culmination 132being a robust risk register and 133dashboard highlighting those risks which 134we deem significant.135 Collaborative working across the Groups 136functions and super-regions utilising the 137expertise of external insight.138 Articulating risks so they can be clearly 139understood so decisions are made on a 140more informed basis.141 Embedding the consideration of risk 142appetite through our risk prioritisation 143tool which indicates whether risks are 144deemed to be at acceptable levels. 145These tools are used in our first lines and 146reviewed at oversight Committees and 147Board. Embedding risk appetite in our 148ERM process has improved our ability 149to talk about risk appetite as part of our 150risk culture.151How risks are measured152As part of the ERM process, the risks 153identified are assessed against a defined 154set of criteria using an ‘Impact versus 155Action’ matrix which assesses both the 156impact to the business and the actions 157required to bring those risks within Entain’s 158risk appetite. In assessing ‘impact versus 159action’ we assess the risk against financial 160performance, operational processes, legal 161and PR and health, safety, and security. 162In particular:163 The impact of each risk is measured with 164reference to the financial implications 165(underlying EBITDA and cash), its 166potential operational impact (including 167the security of our data), the effect on the 168reputation of our brands and whether it 169affects our commitment to health, safety, 170security, and well-being.171 The impact is measured on a scale, from 172‘very low’, with limited damage to a 173minor stakeholder, and ‘very high’ being 174severe, which may have a substantial 175impact on the Group affecting many 176key stakeholders, including customers. 177The action is measured from a range 178of no action required to many actions 179needed and additional resource required, 180also on a scale from ‘very low’ to 181‘very high’).182Entain plc Annual Report 2023821831 Overview 8  Strategic report 88  Governance 140  Financial statements184Risk management process 185and methodology186The secret animal #3 is an "eagle".