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3.2.2.3.Identifying and analyzing risks

The Group identifies and analyzes the key risks that, if they occurred, would affect its ability to fulfill its objectives. It takes the appropriate measures to limit the probability of these risks occurring and the consequences if they do.

As part of these measures, the Group has a Risk Coordination Committee, which reports to the Corporate Secretary and meets on a monthly basis. The Committee’s members comprise representatives from the following departments:

a the Risk Management Department;

a the Group Safety and Security Department

a the Legal Affairs Department;

a the Group Insurance and Hotel Risk Prevention Department;

a the Internal Audit Department.

Identifying risks

The Group is exposed to a number of risks in the normal course of business.

These risks, together with the related control procedures, are described in the “Risk Factors” section of this Registration Document. They mainly correspond to operational risks (geopolitical risks, health and safety risks, business continuity risks, reputational risks, IT risks, competitive risks and laborrelated risks), as well as environmental risks, legal risks (including litigation and arbitration risks) and financial risks (liquidity risks, counterparty/sovereign risks, currency and interest rate risks). The “Risk Factors” section also includes a description of the Group’s insurance strategy.

Risk mapping

Internal control risk maps are prepared based on the Internal Audit assignments and above-mentioned self-assessments. These maps, which highlight issues that require priority action, are included in the relevant Internal Audit reports and are periodically presented in summary form to the Internal Control Committee and the Audit and Risks Committee.

A global risk map covering all internal and external risk factors has also been developed in order to obtain data in a standard form concerning the Group’s levels of risk exposure as perceived by Executive Management and by each unit, and to prepare the appropriate action plans when required. Each risk is assessed based on the level of potential damage it could cause, the probability of it occurring and how efficiently it is managed.

The Risk Management Department subsequently helps the operating divisions to put in place corrective measures in order to mitigate the main identified risks.

Corporate governance

REPORT OF THE CHAIRMAN OF THE BOARD OF DIRECTORS

3

In 2012, Accor continued to implement its coordinated risk
management approach, with Executive Management and all
of the Group’s units updating their risk maps. As is the case
every year, the results of these updates were presented to the
Executive Committee and the Audit and Risks Committee in
December.

3.2.2.4.Control activities

To improve control of identified risks, the Group has set up
control procedures that comply with its standards and cover
both operating and financial information processes.

Authorization process for expansion capital
expenditure and disposals

A procedure has been set up for the prior authorization of
capital expenditure projects, to ensure that they comply
with Group strategy and return-on-investment-criteria. The
procedure requires formal authorizations to be obtained from
the appropriate line and staff managers, in a standard format.
A similar authorization procedure has been established for
disposals.

As part of this process, the Group has an Investments Committee
which is tasked with reviewing projects representing amounts
of between €5million and €100million (or €2.5million for the
acquisition of minority shareholdings). Based on its findings,
the Committee decides whether or not to approve the project.

In 2012, the Committee’s members were the Chairman and
Chief Executive Officer, the President and Chief Operating
Officer, Responsible for Worldwide Operations, the Global Chief
Operations Support Officer in charge of Development, and the
Global Executive Vice-President, Asset Management. The Senior
Executive Vice-President responsible for Hotel Development is
also a member of the Investments Committee and leads any
discussions on hotel development projects.

The Investments Committee meets around once a month.

Preparing and controlling the consolidated
financial statements

The consolidated financial statements are prepared by Group
Finance based on information reported by the subsidiaries’ Chief
Executive Officers and Finance Directors. The format of the
consolidation packages is determined by the Group.

The subsidiaries are responsible for the information contained
in their consolidation packages and are required to make formal
representations to Group Finance about the fairness of reporting
data and its conformity with Group accounting standards and
policies.