What we addressed in 2014
The process described above for identifying, evaluating and managing the principal risks faced by the Group operated during the period and up to the date of this Annual Report. Such a system can only provide reasonable, and not absolute, assurance, as it is designed to manage rather than eliminate the risk of failure to achieve business objectives.
Following a review by KPMG LLP of the effectiveness of the Group's governance framework against market practice for listed companies, management is in the process of implementing the key recommendations. These included enhancing our risk management capability through establishing an Internal Audit & Risk function in July 2014 and consolidating in a common area and format the existing and revised key policies and procedures.
The Audit Committee, on behalf of the Board, undertook an annual review of the effectiveness of risk management and the system of internal control, covering all material controls including financial, operational, compliance controls, and risk management systems.
For further information on the review of financial reporting and for a description of the Company's externally facilitated control and governance review see the Audit Committee report.
What we will be looking at in 2015
Activities to improve our strategic, programme and operational risk management capabilities, including business continuity and information security, will continue in 2015. Our trading strategy is reviewed and amended as necessary to reflect the increasingly competitive grocery trading environment.
2015 will also see us begin to integrate our environmental, social and governance (ESG) risks across the business. Our long-term aim is for integrated reporting, and we see the greater integration of ESG risks throughout the business, along with transparent stakeholder dialogue, as key drivers of this.
The new Internal Audit & Risk function will provide independent and objective assurance and advisory services designed to add value and improve the operations of the business. Its scope will encompass, but not be limited to, the examination and evaluation of the adequacy and effectiveness of Ocado's governance, risk management and internal control processes.