Principal risks and uncertainties

Competition /

We work in a competitive environment where technological advances potentially allow our current and prospective clients to be reached by suppliers from anywhere in the world. We ensure that competitor and market trends are continually tracked and monitored, and we aim to benchmark competitor performance and pricing where possible.

For some services, aggressive pricing from competitors in countries where costs are lower could cause a reduction in our own revenue and margins. To minimise this risk, we aim to build long term relationships with our clients and to remain competitive in our offerings by reducing our own costs where possible. We also aim to ensure that we are the supplier of choice by maintaining high standards, developing tools that add value to our clients’ marketing and business activity and delivering work to our clients on time.

Parts of the industry we operate in have relatively low barriers to entry, increasing the potential risk of new competitors striving to take a part of our market share. We have already seen some search engines offer online advertising directly to potential clients. Our range of additional digital services helps manage this risk by enabling us to offer clients a portfolio of services and therefore strengthen client relationships. In addition, we run on-going training programmes across the Group to ensure our employees are fully aware of, and trained to use, the latest client service tools available to them.

Security of data /

We retain confidential information in relation to our clients’ new product pipelines and advertising strategies. We also host client databases and other applications on our own servers. Unauthorised access to, or inappropriate use of, any of this information could have a detrimental impact on our reputation and adversely affect our businesses. External access to such information is protected by our IT security framework whose strength we continually seek to improve and monitor by performing IT vulnerability testing and IT security audits, which also review internal access rights to client data. Additionally, we take precautions to protect our clients’ data by using confidentiality clauses in our employees’ contracts and have guidelines in place that prohibit the posting of confidential information.

The Group is obliged to comply with a range of legal guidelines and regulatory policies around the world, for example in areas like taxation policy, accounting and corporate governance. Consequently, the Group’s legal team continually monitors changes in regulation with a view to adapting to new laws before they come into force, putting in place detailed planning processes and implementing contingency plans as and when appropriate. In addition, close relationships have been developed with the Group’s legal advisors who provide regular updates on the regulatory and legal environment. Any significant changes in regulations are swiftly communicated to the Group’s executive management team.

We have instituted a number of actions in 2010 to support us in complying with latest regulations and legal guidelines. These include the establishment of a regulatory intranet which is utilised as a tracking tool for new and updated regulation, the implementation of an on-line compliance training system which has recently been rolled-out across the Group and the recruitment of an in-house compliance officer to manage our risks in this area.

Talent management /

Aegis is a people business and we are proud of our employees, but recognise the risk of losing our key talent. Talent management is therefore one of our key priorities and something we take very seriously. We aim to be able to offer market competitive incentive plans to attract and retain quality staff. We also aim to promote within so that our staff can develop an enduring career with us. We receive feedback from our employees via regular Employee Opinion Surveys, and produce follow-up programmes based on the results. We also run a regular process to provide an opportunity for communication between an employee and their line manager in terms of their career progression and ambition.

Our people are important in our client relations and the wealth of knowledge they hold. The departure of key personnel could have an impact on client retention, key decision making and successfully leading our business forward. All of our businesses, including our global teams, are required to undertake succession planning and we ensure that no relationship with a major client is restricted to one individual. For employees leaving the business, exit interviews are conducted to understand reasons for their leaving and action plans are implemented as necessary.

Corporate responsibility /

The typical risks associated with corporate responsibility have a very wide impact, from operational capacity to reputation management. Compared to other industries, however, we do not consider ourselves overly exposed to the impact of climate change and we do not have a presence in countries which have a history of human rights issues.