RWS AR 23 Final Single pages - Flipbook - Page 46
Principal Risks and Uncertainties (continued)
Risk category
Description
Mitigation
RWS has a leading position in new
translation technologies however, we could
be disrupted if existing or new competitors
launch or commercialise new linguistic
AI based solutions more e昀昀ectively than
RWS. This could challenge our competitive
standing, customer proposition, and put
customer relationships, demand for our
services, new growth opportunities and
revenues at risk.
There is continuous review of available
technology, AI, possible disruptions and the
risks and commercial opportunities for RWS.
We invest in our technology propositions to
leverage our unique technology, product and
sector expertise to di昀昀erentiate our o昀昀ering.
We also scan technology and AI developments
to identify and manage potential threats and
opportunities and incorporate leading edge
technology in our solutions.
TECHNOLOGY
New technology and AI
STRATEGIC AND FINANCIAL
Failure to deliver
pro昀椀table growth
To grow, the Group needs to win and
retain business with both new and existing
clients and adapt continuously to their
changing needs. We also need to price
competitively in order to win business and
support margins. Whilst our client retention
remains strong, we are always at risk of
losing clients or seeing clients reduce their
spend or the share of their spend that
they send to us. There is also a risk that
our ability to forecast client spend may be
unreliable leading to our business planning
and associated market guidance being
inaccurate.
In terms of retention, we measure client
satisfaction regularly and, where appropriate,
have account managers and client service
teams focused on our key accounts. We have
been investing in our sales and marketing
capabilities and in a series of new growth
initiatives. We have also been training our
sales and account managers through our
'Leading for Growth' programme and have
been making improvements to our key
account plans and our approach to pricing. We
continue to manage long-term relationships
closely to reduce revenue risk. Forecasts are
also reviewed regularly at Board and Executive
Team level to inform business planning and
shareholder communications.
In昀氀ation and pricing
pass through
The Group operates in competitive markets
which can mean that it isn’t always possible
to pass through in昀氀ationary cost increases
to our clients through pricing. This can lead
to margin compression where we aren’t
able to 昀椀nd e昀케ciency savings to balance any
di昀昀erential between pricing and cost.
The Group seeks to recover cost increases
through pricing where possible. We have
been giving this increased focus through
improved training, measurement and seeking
contractual pricing clauses where these can be
agreed with clients. We also seek to implement
cost e昀케ciencies wherever possible to maintain
margins.
LEGAL AND COMPLIANCE
46
Legislative and
regulatory compliance
risk
The pace and demands of legislative
and regulatory change as well as the
increase in stakeholder expectations,
can adversely impact on our revenues
and increase potential compliance and
reputational risks (e.g. AI, privacy and cyber,
corporate governance, climate, sanctions,
environmental, health and safety).
The Company has appointed a General
Counsel and Company Secretary and has
established a uni昀椀ed Group legal team and
company secretarial function to support
the business and ensure a consistent global
approach to legal risk management. The
RWS Code of Conduct has been updated,
underpinned by the roll-out of an allcolleague training programme. Our ethics and
compliance policy framework is reviewed and
enhanced periodically and as necessary.
Failure to manage dataprivacy requirements
and expectations
The Group is facing increasing regulation
across its multi-national operations as the
global landscape of data protection, privacy
and cyber laws develops. The current pace
of innovation and regulation also leads to
additional expectations from our clients
in relation to the processing of personal
data. The broader scope of data processing
anticipated by the Group’s AI and data
services strategic initiatives increases our
risk exposure.
The Group has a central data privacy capability
in place responsible for developing and
implementing appropriate data privacy policies
and procedures across our business. The legal
team also plays an active role in reviewing data
privacy requirements and obligations in client
and vendor contracts.
RWS Holdings plc — Annual Report 2023
STRATEGIC REPORT
