PERNOD-RICARD - URD 2021-22 EN

4. Risk management Risk factors

5. Talent development (1)

RISK IDENTIFICATION AND DESCRIPTION

POTENTIAL IMPACTS ON THE GROUP

Pernod Ricard’s success depends on the commitment of its employees and its ability to attract and retain them as well as develop their skills, particularly in highly competitive labour markets, such as North America, Asia, Africa and Eastern Europe, where turnover rates are normally higher than in the rest of the world. This competitive talent market is heightened by the search for scarce skills, changes in the aspirations of new generations and the pandemic impact that has accelerated certain trends. Moreover, employee development through geographic mobility is sometimes an issue (diversity of career paths, management of the partner’s career, cost control, Covid impact, etc.).

The Group is aware that talent management must remain a key area of focus to ensure the sustainability of its activity and ensure the transmission of key know-how within the organisation. Excessively high turnover or unduly long job vacancies could have a financial impact and demotivate teams. This could potentially slow the implementation of key Group development projects and have an adverse impact on its business, results or reputation.

RISK CONTROL AND MITIGATION

To mitigate risk, the Group established and embedded worldwide a robust global talent management strategic planning, fully leveraging technology and data, with a common language to assess performance and develop Talent & Performance. This together with a skills development framework and offer to grow Talent and facilitate dynamic career management. Accordingly, shared processes and tools have been developed to allow all affiliates to optimise the assessment of skills and performance, to formalise the identification of talents, to encourage internal mobility and to monitor employee engagement. Since 2019, a talent management process (Let’s Talk Talent) powered by a global human capital management system, and a new global leadership model with expected behaviours at each level, has been put in place. Shared by the whole Group, this global framework puts the employee at the centre of Human Resources processes and clarifies performance expectations, using a common language for everyone. Moreover, Pernod Ricard University trains the Group’s future leaders through leadership and skills based development programmes. Succession plans are regularly reviewed by the Top Management, especially for key positions within the Group and annually Talent conversations meetings are conducted at the very top senior executive level to ensure Pernod Ricard have talents ready at the right time at the right place. Furthermore, from a talent engagement perspective, on a yearly basis the Group is conducting Global Employee Engagement Surveys. Lastly, measures are carried out regularly to improve quality of life at work. They include the facilitation of remote work, measures related to well-being at work, the modernisation of workspaces and managerial awareness-raising programmes.

6. Negative media coverage

RISK IDENTIFICATION AND DESCRIPTION

POTENTIAL IMPACTS ON THE GROUP

The constant increase in the number of social networks, the speed of circulation of information and its influence, mean that Pernod Ricard could face the risk of being exposed to harmful media coverage and inappropriate publications or messages. Furthermore, the prolonged spread of misleading information in the media and in particular on social networks (fake news) has been observed in recent years. It cannot be ruled out that the Group could be affected by this type of action, which is difficult to control.

A malicious attack aimed at harming Pernod Ricard’s reputation or a genuine incident in relation to its brand portfolio could have a significant impact on the Group’s image and reputation. Further widespread negative media coverage could jeopardise consumers’ confidence in Pernod Ricard brands, resulting in a potential sales decline.

RISK CONTROL AND MITIGATION

The Group’s risk is managed through a series of internal and external measures. While internal measures focus primarily on raising the awareness of Pernod Ricard employees to the impact of social media and sharing best practices in terms of communication, external measures are used to monitor social networks.

Note that this risk is also covered in Subsection 3.3.2.1 of the Non-Financial Information Statement. (1)

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Pernod Ricard Universal Registration Document 2021-2022