Managing risk

Successful management of risk is critical to the delivery of our objectives at TUI Travel. We strive continually to improve operational performance, reduce losses and create superior shareholder value in the pursuit of the Group’s strategic goals.

Our approach

Whilst the ultimate responsibility for risk rests with the Board, effective day-to-day management of risk sits within our businesses. The Group Risk Management Committee (GRMC), a committee of the Group Management Board (GMB), provides an oversight of the framework for managing risk throughout the Group and ensures the most significant risks to the Group are identified and mitigated accordingly. All key areas of the business adopt the Group’s uniform enterprise-wide risk management (ERM) approach, which is used to inform decisions on the Group’s strategy. Risks are considered in the context of:

• longer-term strategic and emerging threats; 

• medium-term challenges associated with business change programmes;

• shorter-term risks triggered by changes in the external and regulatory environment; and

• shorter-term risks in relation to internal operations and control.

Such risks are reviewed by our Group functions, Sectors and source markets on a quarterly basis. They are measured against predefined criteria, relevant to the specific business area, to ensure that challenges are prioritised and managed in order of significance. It is the responsibility of Sector Boards across the Group (and senior management teams beneath them) to review, challenge and agree the risk profile for their area of responsibility and to ensure resource is allocated effectively to manage risk and maximise opportunities.

The Group Risk Management team consolidates the risk information on a six-monthly basis to create the Group Risk Profile and reports this to the GRMC (chaired by the Chief Executive). The GRMC monitors the ongoing status of key risks to ensure that the progression of key action plans is in line with the Group’s risk appetite.

In addition, the effectiveness of the risk management process is monitored by the Audit Committee through its review of audits undertaken by Group Audit Services and reports provided by the Group Risk Manager.

Key areas of focus

With a common structure and process for ERM now established, the GRMC recognises the opportunity to continue to leverage this investment and drive better value from it. It intends to enhance risk competencies across the Group and develop a culture whereby risk management becomes a routine way of working from planning and strategy setting through to daily operations.

Individual members of the GRMC have taken ownership for specific risks on the Group Risk Profile and are responsible for developing appropriate mitigation and response plans to reduce the likelihood and impact of risks within the Group’s control and to limit and contain the impact of those outside its control. These in turn are communicated to the wider business to implement in order to ensure risks are managed to within acceptable levels.

To read more about how we manage risk, click here.