G4S has in place a well developed risk assessment process. A key feature is the requirement for businesses to routinely assess and report on their risks, including the actions they are taking to mitigate these risks to an acceptable level. Business ethics risks are included as part of this process.

The risk assessment covers a wide range of business risks that are relevant to G4S including macroeconomic trends, marketplace issues, product and key focus areas identified by executive management. Businesses are encouraged to consider how risks can become opportunities that can be used for the benefit of G4S and its stakeholders.

An internet-based system called RACSE (Risk Assessment and Control Self Evaluation) provides a system for our businesses to:

• Identify and analyse risks that could impact upon the business and their stakeholders
• Check the controls that they have in place to manage and mitigate these risks
• Make improvements to the controls where necessary

Risk management committees exist at regional, divisional and group level. The regional committees meet at least annually and the divisional and group committees meet quarterly. A standard agenda covering risk and control issues is considered at each meeting and risk profiles are reviewed and updated at each meeting.

Nearly 70% of the 125 countries where G4S operates can be categorised as developing countries or new markets. Many of these countries face a mixture of challenges including persistent poverty, weak and volatile economic growth, low capacity, poor infrastructure and inadequate social services.

In many cases the social legislation and regulation is non-existent, weak or widespread non-compliance by the business community is tolerated by the authorities.

In these new markets, G4S can often bring the skills developed elsewhere in the world to benefit its customers and the country as a whole, by creating significant employment and contributing to the economic development of the country. There are major business opportunities in these markets, but there can also be associated risks.

G4S policy is to comply with all local laws and regulations and to act ethically. Our internal audit process enables us to identify where G4S standards are not being met.