Material focus areas,
risks and opportunities
Our decentralised, asset-light and everyday essential products and services business model is an effective risk management tool. We cannot control macro conditions but we can control how we respond.
Lindsay Ralphs, Chief executive
The Bidvest board appointed a risk committee to assist in recognising all material risks to which the Group is exposed and ensuring that the requisite risk management culture, policies and systems are in place and functioning effectively. Risks are assessed on an enterprise-wide level and their individual and joint impact considered. Internal audits assist in evaluating the effectiveness of the risk management process and comment on this in their own assessment reports. Management is accountable to the board for implementing and monitoring the processes of risk management and integrating this into day-to-day activities. Divisional risk committees are engaged to actively focus management on critical issues faced at a business and industry level.
The key strategic risks are reported to the Group risk committee for consideration at board level. The risk committee membership is reviewed annually. The material risks identified have emerged as a result of analysing and understanding the direction in which each entity is moving as well as the overlay of the Group’s strategy and macro conditions.
| KEY RISKS | MATERIAL FOCUS AREAS | MANAGEMENT RESPONSE | FLOW THROUGH TO STRATEGY | ||||||
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Inconsistent policy application
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Increasingly complex business, policy and regulatory environment | Management focuses on key senior relationships with strategic customers to allow for mutually beneficial contract outcomes. Inconsistent black economic empowerment policy and legislation makes compliance challenging. Bidvest is working together with all stakeholders towards an aligned and settled framework. Impact on KPIs:
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Bidvest’s decentralised model allows it to adapt and implement value-adding solutions and structures at operational level. | ||||||
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Challenging economic outlook
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Remaining competitive and relevant | Bidvest is a customer-centric organisation. The protection of its core business strength and reputation is critical. Bidvest encourage creative approaches and innovation and embrace the ability to adapt quickly and proactively to changing customer requirements, market dynamics and digital advancement. Bidvest constantly evaluates its digital strategies. Impact on KPIs:
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Agility, a can-do attitude and appropriate digital strategies result in innovative solutions and open up additional opportunities. | ||||||
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Loss of agency and distribution rights
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Fostering positive long-term relations with key suppliers | This remains a cornerstone of the way Bidvest does business and is recognised as a major strength. Management is constantly challenged to manage and grow these relationships. The Group builds sustainable, value-adding relationships. Impact on KPIs:
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Constant communication and monitoring of demand changes allow Bidvest businesses to be pro-active and part of the solution. | ||||||
Talent attraction and retention
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Developing and maintaining high calibre staff | Bidvest focuses on maintaining and rewarding high-performance culture. It encourages entrepreneurial attitudes and develops people through training academies, graduate and learnership programmes and recognition. The short/medium-term disruption in the event of sudden departures due to a lack of skilled management is well understood. Impact on KPIs:
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Bidvest understands that people create wealth, companies report it. Home-grown talent thrives in our entrepreneurial, decentralised model. | ||||||
Escalating IT cost and cyber security
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Cost-effective, efficient IT systems and support structures | Group IT governance framework supports effective and efficient management of people, technology and information. Specific attention is given to cybersecurity. Group internal audit ensures adherence to the IT frameworks and guidelines. Comprehensive group-wide property damage and business interruption insurance is in place. IA enhanced by the introduction of ALICE. Impact on KPIs:
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Enable and empower the decentralised business model in the most cost effective manner, to operate optimally and grow. | ||||||
Non-performing asset creep
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Asset and return management | Management actively monitors and drives performance in asset management, particularly working capital. This receives the focused attention of the audit committee. Credit risk and inventory levels are crucial. We respond by staying close to customers. The disposal of non-core assets remains a priority and forms part of capital management. Impact on KPIs:
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Ambitious working capital targets and dynamic sourcing support returns and adds value to customers. | ||||||
Other material focus areas
| Making value-enhancing acquisitions |
Meeting and exceeding customer expectations |
Environmental impact consciousness |