| Material focus areas | Management response | |
Complex and |
Management focuses on key senior relationships with strategic customers to allow for mutually beneficial contract outcomes. A proliferation of regulatory and governance requirements across industries add costs in an already price-sensitive market while complexities consume a growing amount of management time and resources. Innovative solutions are required. Impact on KPIs:
|
Flow through to strategy Bidvest’s decentralised model allows it to adapt and implement value-adding solutions and structures at operational level. |
Material focus areas, risks and opportunities
Our decentralised, asset-light and everyday essential products and service business model is an effective risk management tool. We cannot control macro conditions, but we can control how we respond.
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 combined impact considered. IA 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.
Economic growth impeded by varying empowerment and inclusive growth criteria
Challenging economic outlook
| Material focus areas | Management response | |
| Remaining competitive and relevant |
Bidvest is a customer-centric organisation. The protection of its core business strength and reputation is critical. Bidvest encourages creative approaches and innovation and embraces 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:
|
Flow through to strategy Agility, a can-do attitude and appropriate disruptive strategies result in innovative solutions and open up additional opportunities. |
Loss of an agency and distribution rights
| Material focus areas | Management response | |
Fostering positive |
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 KPI:
|
Flow through to strategy Constant communication and monitoring of demand changes allow Bidvest businesses to be pro-active and part of the solution. |
Shortage of skills
| Material focus areas | Management response | |
| Developing and maintaining high calibre staff |
Bidvest focuses on maintaining and rewarding a high performance culture. It encourages entrepreneurial attitude and develops people through training academies, graduate and learnership programs and recognition. The short-medium-term disruption in the event of sudden departures due to lack of skilled management is well understood. Impact on KPI:
|
Flow through to strategy Bidvest understands that people create wealth, companies report it. Home-grown talent thrives in our entrepreneurial, decentralised model. |
Escalating cost of doing business and cyber assaults
| Material focus areas | Management response | |
| Cost-effective, efficient IT systems and support structures |
The Group’s IT governance framework supports effective and efficient management of people, technology and information. Specific attention is given to cybersecurity and data protection. Group IA ensures adherence to the IT frameworks and guidelines. Comprehensive group-wide property damage and business interruption insurance is in place. We advocate exploring and finding solutions enabled by technology. Impact on KPIs:
|
Flow through to strategy Enable and empower the decentralised business model to operate in the most cost effective manner, to operate optimally and grow. To manage the cost of compliance, particularly in regulated entities. |
Excessive capital investment
| Material focus areas | Management response | |
| Asset management | Management actively monitor and drive 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. Impact on KPIs:
|
Flow through to strategy Ambitious working capital targets and dynamic sourcing support returns and add value to customers. |
Other risks:
1. Delivering value-enhancing acquisitions
2. Reputational risk embedded in sub-contracting and third-party relationships
3. Environmental impact consciousness
4. Continued low business confidence, constraint pro-growth-oriented capital outlays and weakening longer-term growth potential in South Africa