RISK FACTORS AND INTERNAL CONTROL In addition, while constantly seeking for innovation, 2.1.1.9 Risks relating to human resources the Rexel Group companies adapt their suppliers portfolios depending on demand. Certain companies Risk may thus have to identify new suppliers for the key To attract, develop and retain talents is a priority for products categories that they offer. the Rexel Group to support its growth and strategy, and develop innovative solutions. The Group’s in- 2.1.1.7 Risks relating to the Rexel Group’s house and external strategy in becoming a leading reputation benchmark in human resources management and development focuses on 4 main areas: managers Risk and change management, performance culture, Considering its international foothold and visibility, employer brand, and organizational effectiveness. the Rexel Group is exposed to various types of However, changes in local employment markets and criticism or al legations concerning its reputation. in particular the increasing competition pressure for Communication channels such as the Internet and recruiting top talents could have a negative impact social media react to information in real time and on the profitability of operations. exponential ly increase the amount of information In addition, Rexel employees are exposed to safety made available. This may accelerate the impact risks, as detailed in paragraph 4.3.3.3 “Working on the Rexel Group’s reputation, its governance, conditions” of this Registration document. financial condition or results of operations. Management of risk Management of risk Various in-house programs have been launched In order to l imit such risk and to mitigate its to boost the performance-oriented corporate impact, the Rexel Group uses its communication culture (top 100 development program, identifying strategy to proactively monitor Internet tools, and promoting high-potential employees with key raise employees’ awareness through informational management and technical skills, etc.). and educational campaigns, and sensitize al lof its employees across its businesses by Recruitment of external candidates with proven distributing its Ethics Guide, by imposing stringent track records helps the Group ramp up skil ls and communication rules, which include a best expertise in key domains. practices guide and a charter for the use of social In addition, the Rexel Group is committed to medias, and by implementing a regularly-updated providing all its employees and all people on its sites crisis management process. a safe working environment. Risks related to safety and mitigating measures are detailed in section 4.3 2.1.1.8 Risks relating to operations in emerging “Social information” of this Registration document. or non-mature countries Risk 2.1.2 Legal and regulatory risks Rexel develops its activities notably in emerging or 2.1.2.1 Risks relating to pending litigation non-mature countries, where its control environment is lower mainly due to the small size of local teams Risk and/or due to a potential ly changing economic, Risks related to pending litigations are described in political, legal or tax environment. detail in note 28 of the Notes to the consolidated financial statements of Rexel for the year ended Management of risks December 31, 2017, which are set out in section 5.2 Continuous risk assessment,integration and “Consol idated Financial Statements” of this monitoring processes of these entities or activities Registration document. have been defined to eventually ensure an adequate level of internal control on operational risks over the Management of risk long term. Rexel is unable to provide assurances These l itigations have been analyzed by the that no deficiency will affect these processes, which management who concluded that, as of closing date, would impact the Rexel Group’s financial conditions they should be subject to no additional provisions, or results. other than those already booked. REXEL 2017 – REGISTRATION DOCUMENT 40