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2014 Registration Document
Corporate governance
3
Risk management
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Credit risk
To address the risk of borrower insolvency, the Group’s financial
companies have systems to check debtor quality and solvency (scoring
tools, budget and past references which attest to the counterparty’s
quality, searches on positive and negative credit files, active management
of debt collection and legal actions, etc.).
Consumer receivables are classified as bad debts as soon as they show
a risk of total or partial non-recovery (late payment, etc.). Impairment
models are established based on current regulations applicable to
credit companies in each country (classification of out standings into
homogeneous risk categories, in terms of the likelihood of recovery and
modelling loss probabilities on a historical basis).
Detailed information on the Group’s exposure to credit risk appears in
Note 36 to the Consolidated Financial Statements (pages 195 and
following pages).
3.5.2
Risk prevention
Effective risk management relies on a shared vision of challenges and
optimal coordination.
The Group incorporates risk management into its day-to-day business
practices. Risk management is a job shared by all employees with the
aim of developing a risk management culture.
Risk management within the Group is decentralised to the country
executive directors, who are tasked with identifying, analysing and handling
the main risks with which they are faced.
They are supported in this by the Group Risk & Compliance department,
which coordinates the deployment of a guidance and mapping tool
for major risks, while mapping operational risks and developing tools
deployed in the countries.
The Risk & Compliance department also worked on country-by-country
mapping of health risks, natural risks, risk of crime and terrorism and legal
risk, while conducting studies on emerging risks and supporting certain
operational departments. It also supports the Purchasing departments
in their knowledge and evaluation of supplier risk.
In operational terms, the Group Risk and Compliance department
coordinates and leads a network of risk prevention directors present
in all Group countries. During 2011, Carrefour communicated a Risk
Prevention Charter which defines the scope of action, the role and
responsibilities of the country-level Risk Prevention units, and the ethical
rules they must follow.
In each country where the Group operates, a Risk Prevention department
is responsible for the security of the Company’s tangible and intangible
assets and ensures the safety of persons present on its sites. It is tasked
with implementing the human, organisational and technical resources
necessary to manage both accidental and intentional risks (natural
disasters, malicious acts, theft etc.).
The prevention policy relies on risk mapping, loss analysis and identification
of emerging risks as part of its on-going oversight and specific studies.
The Risk and Compliance department prepares a consolidated annual
report on the risk prevention function at Group level, with benchmarks
between management and performance indicators for the function in
each country, in terms of loss, workforce, resources and action plans.
3.5.3
Insurance
For the past several years, the Group’s insurance strategy has focused
on providing the best possible protection for people and property.
3.5.3.1
Group insurance policy
The Group’s insurance strategy is primarily based on identifying insurable
risks through a regular review of existing and emerging risks, in close
collaboration with operational managers, the various Carrefour group
departments involved and outside specialists.
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Worldwide programmes
The Group has implemented comprehensive, worldwide programmes
(especially for Property Damage and Business Interruption, Civil Liability
and Construction policies) that provide uniformity of coverage for all
formats (consolidated stores only), wherever the stores are located
(except in countries where regulations prohibit this type of arrangement).