Fiscal 2020 Universal Registration Document

5. Corporate governance

5.4.3 Risk factors

5.4.3.1 Principal Risks & Risk Management Measures
Summary of Sodexo’s Principal Risk Factors

The summary table of Sodexo’s principal risks shows a classification of the risks by reference to the pillars of Sodexo’s Strategic Agenda, as well as risks from the external environment. As outlined in 5.4.2.3, each risk is assessed using impact and probability to give an evaluation of the inherent risk, and then a third criteria “level of control” is used to evaluate the overall net risk. The table below shows the net risk assessment. The most significant risks are presented at the top of each category, and the materiality of each risk shown is using a two-level rating scale, as follows:

RISK MANAGEMENT AND MAIN RISKS

CLIENT & CONSUMER CENTRIC
  • Client retention : Medium + High
  • Consumer expectations : Medium 
  • Bidding risk : Medium 
  • Competition : Medium
OPERATIONAL EFFICIENCY 
  • Client contract execution : MEDIUM + HIGH
  • Technology and information security : MEDIUM
TALENT
  •  Talent management and development : MEDIUM 
  •  Resource planning : MEDIUM
 CORPORATE RESPONSIBILITY
  •  Food, services & workplace safety : MEDIUM 
  •  Environmental impact : MEDIUM
 EXTERNAL ENVIRONMENT 
  •  Unpredictability of the duration and effects of the Covid-19 pandemic : MEDIUM + HIGH
  •  Compliance with laws and regulations : MEDIUM
Description of Principal Risk Factors

The tables describing Sodexo’s principal risk factors (see below) give an estimate of their timeframe (short-term, medium term or long-term), their possible impact and examples of measures implemented to reduce these risks.

The risk timeframe is shown as follows:

  •  Short-term (less than a year) 
  •  Medium Term (1 to 3 years) 
  •  Long-term (over 3 years)