In conjunction with senior management, the operating management teams of the countries/regions as well as shared service centers are heavily involved in monitoring risks associated with major contracts or business activities in emerging countries. They continually analyze the Group’s exposure to the loss of significant contracts, to risks of conflicts of interest and to changes in contractual clauses.
The risks relating to accounting information, the external growth policy, management of the liquidity position, exchange rates, changes in the Group’s debt or tax position are monitored by the Finance Department, in conjunction with senior management.
The risks associated with accounting and financial information are also subject to a detailed control, overseen by the Internal Control and Risk Management Department, on the basis of which the FMC (Financial Monitoring Controls) are defined.
The procedure for monitoring the Group’s risk management system was formalized beginning in 2008 with risk mapping. All of the risks that may have an impact on the Group’s finances, operations or image are listed. These impacts are the subject of an evaluation and a probability of occurrence is estimated for each risk identified; a level of intrinsic risk is therefore determined as well as a level of residual risk after taking into account the control system.
Thus, pursuant to article L. 225-37 of the French Commercial Code, it is stated that with regard to the Group’s activities, the financial risks associated with the impact of climate change have a negligible impact. However, the Group is mindful of measuring its environmental risks and finding solutions to reduce them (Chapter 4 “CSR” of the Universal Registration Document).
The risk mapping is updated on a regular basis to strengthen the risk management system on an ongoing basis.
In 2019, the Group risk mapping was updated twice, and was presented to the Strategy and Risk Committee meetings of March and September 2019. The “Risk” Department also carried out a detailed study of the risks associated with the implementation of the second phase of the HR IT system project, analyzed the roll-out of the Salesforce tool across the Group and made recommendations regarding best use practices, and played a major role in the work done within the Group to ensure compliance with the Sapin 2 Act, in particular updating the corruption-related risk mapping.
This mapping also served as a basis, along with other items, for preparing the 2020 audit plan.
The insurance policy purpose, centrally managed within the Insurance Department, is to provide the best cover for our employees and assets, by achieving a right balance between local and corporate insurance cover.
By implementing a two-level insurance cover (local and centralized), the Group strives to ensure comprehensive cover and risk management in all the countries in which Publicis is present.
On a local level, mainly through the Re:Sources shared service centers, entities must take out general liability, property damage and business interruption, automobile and employer’s liability insurance policies, as well as health and life insurance cover for employees. These insurances are taken out in compliance with the local regulations.
The only exception is the European zone: Using the freedom of services framework in Europe, the Group has taken out a Property damage and Business interruption insurance policy and a General liability insurance policy, which could apply to all European subsidiaries.
At Group level, insurance programs have been implemented with leading insurance companies with the aim of automatically covering all subsidiaries against the financial consequences of risks such as, but not limited to:
In addition, the Group negotiates and sets up specific covers that subsidiaries may subscribe depending on their business needs, such as credit insurance, health and life insurance for expatriates and specific insurances for film and TV shoots.
The insurance policies are regularly reviewed to customize the cover to any changes in our activity and in particular new digital services: the Group focuses particularly on this risk and its cyber risk insurance cover.
The amount of cover is considered to be consistent with the risk assessment and with the market practices.
In light of the significant Mergers and Acquisitions Group’s activity, the Insurance Department also oversees the integration of acquired entities within the Group’s schemes.
