106 ITV plc Annual Report and Accounts 2023 ITV plc Annual Report and Accounts 2023 107 G AUDIT AND RISK COMMITTEE REPORT O VE R NAN management took the decision to continue C to implement ‘no regrets’ improvements. E The Group continues to focus on 2023 Key Matters strengthening its internal controls environment and has robust plans in place Maers considered at the meetings that will put the Company in a strong position to comply with the controls’ effectiveness are set out on the pages that follow. statement requirement, introduced in the FRC’s revised Corporate Governance Code issued in January 2024 and applicable from 1st January 2026. MARGARET EWING I was delighted when ITV gained a gold CHAIR, AUDIT AND RISK COMMITTEE award for best FTSE 250 Annual Report and Accounts at the Corporate & Financial Awards, and was Highly Commended by the Corporate Reporting Awards. At ITV, Meetings in 2023 Our role we strive to ensure we maintain clear and Dear Shareholder stabilisation of the transformation. This coherent reporting that provides a clear link The Committee held five scheduled The Committee’s terms of reference, WHO IS ON THE COMMITTEE enabled me to gain a good understanding of meetings during the year, and a number reviewed annually and last updated in On behalf of the Board, I am pleased to from purpose to strategy to operations, present the 2023 Audit and Risk Committee the ongoing challenges and the implications and the Committee was delighted that of ad hoc meetings. July 2023, can be accessed on our Composition for resourcing, morale and welfare of the colleagues’ efforts and focus have been website. The current members of the Report which sets out the key areas of focus impacted teams, which I fed back to relevant In addition to Committee members, the during 2023. recognised in this way. Committee are: management, the Committee and the Board. Chair of the Board, Group CFO and COO, The Committee’s principal • Margaret Ewing (Chair) During 2023, despite the challenging I personally want to thank all ITV personnel Group Director of Finance, Group responsibilities are to oversee and economic environment, the Group Management has continued to implement involved in the Group’s corporate and Finance Controller, General Counsel and provide assurance to the Board on • Dawn Allen a detailed programme of remediation and financial integrity, controls, recording and Company Secretary, Group Director of the integrity and quality of financial • Edward Bonham Carter accelerated its proposition as a vertically enhancement to address internal control Risk Management, Head of Internal reporting, effectiveness of audit integrated producer, broadcaster and reporting for their immense effort, fortitude • Graham Cooke streamer, further developing ITVX following issues highlighted by the internal and and loyalty during 2023 – a year that has Audit (EY) and External Audit lead arrangements and robustness and its launch, growing the global studios external auditors in 2022 and further delivered very significant change and partner (PwC) regularly attend meetings. effective operation of internal controls, Full details of aendance at Commiee business and digitally transforming the identified as a result of the ITV Together improvement within ITV in a very short There were a number of sessions during compliance and risk management meetings can be found on the table on Broadcast business. ITV colleagues have, implementation. The Committee received time frame. the year when the Committee met the processes. The Committee meeting page 82. reports from management, and the external External Audit lead partner and, agendas are tailored to ensure emerging despite an incredible workload, risen to the and internal auditors, at each of its meetings separately, the Head of Internal Audit topics are included and to allow for ad Detailed biographies can be found on challenge and delivered positively and I hope that you find this report informative on the progress in the execution of the and can continue to take assurance from the without executives present. hoc discussion and reviews (including pages 77 and 78. effectively. In this environment, the Committee has continued to focus on risk remediation programme. The Committee work undertaken by the Committee this year. ad hoc meetings when required). The Committee is composed entirely of management, internal controls and the recognises that good progress has been A summary of the Committee’s activities independent Non-executive Directors. made in this area and is confident the Group MARGARET EWING from the date of our 2022 report and In 2023, Anna Manz and Mary Harris retired ongoing restructuring, financial and has an effective control environment; until the date of this report is detailed on from the Committee (and Board), with accounting implications of the strategy CHAIR, AUDIT AND RISK COMMITTEE Dawn Allen joining in October 2023. implementation. however, the Committee also acknowledges 7 March 2024 the following pages. that the Group is on a journey of maturity and The Committee members have, between improved formalisation, automation and them, a wide range of relevant sector and Throughout 2023 I have maintained regular monitoring of its control processes and this ANNUAL REVIEW financial experience, enabling the dialogue with all members of the Committee, will continue to be an area of key focus for Committee to fulfil its terms of reference. the Group CFO & COO, and other members In 2023, an internally facilitated evaluation of the Committee’s performance was This includes providing independent and of management, including meeting with the Committee during 2024. undertaken. Participants in the evaluation, in addition to Committee members, robust challenge to management and our relevant ‘agenda topic owners’ prior to each included all regular Committee meeting attendees. internal and external auditors, to ensure Committee meeting, ensuring the The Committee has spent considerable there are effective and high-quality controls Committee would be provided with the time reviewing and scrutinising the Group’s in place and appropriate judgements are financial results, ensuring it had clear The evaluation concluded that the Committee continues to work effectively, is highly taken. For the purposes of the Code, the necessary information to enable it to guide, oversight of the evolving impact of the engaged and is responding appropriately to its terms of reference. Board considers that Margaret Ewing and challenge and advise and, when required, Group’s strategy on the business and its Dawn Allen, and Anna Manz until her make informed decisions. I also met with Although the evaluation did not identify any concerns, the Committee has agreed retirement from the Board, have recent ITV’s legal advisers in respect of ongoing financial affairs plus emerging risks. This that the areas it will focus on in 2024 will include: and relevant financial experience. litigation and other legal matters and met included adjusted performance measures privately throughout the year with the lead and exceptional items, progress of certain 1. The ongoing programmes of enhancement of the financial, IT, reporting, partner of our external auditor, PwC, and lead legal and regulatory matters and disclosure compliance and operational control frameworks partner of EY, ITV’s provider of outsourced and provisioning implications, programme 2. Stabilisation of Wave 1 of ITV Together (the finance, HR and production accounting internal audit. rights impairment and the implications of transformation programme) and approval of the business case and timing for the proposed reform of the system of commencement of Wave 2 A significant event in 2023 was the go live audio-visual tax credits. Details of the 3. Fraud and risk management improvements, including data governance and in April of wave 1 of the ITV Together Oracle significant financial reporting issues we privacy and speaking up processes Fusion finance and HR systems and considered can be found in this report. 4. Readiness to comply with all existing and emerging regulations and legislation functional transformation. A detailed post Information regarding the Board’s regarding sustainability, climate and other ESG related matters go live stabilisation plan with clear focus stakeholder engagement is set out on pages on change management, governance and 84 to 91, which also indicates where the In addition, the Chief Executive and other members of the Management Board will priority actions is in place and has been Committee took account of the views of the be invited to attend relevant parts of Committee meetings on a more regular basis to communicated to impacted teams across Company’s key stakeholders and considered provide additional strategic and operational insight to the Committee’s reviews and the Group. When the Board visited their interests in its discussions and decision-making. colleagues in Manchester, I held meetings decision-making. Whilst we note that the with the teams in the Group’s Global Finance Government’s previously proposed Operations (GFO) most impacted by the corporate governance reforms are not being development, launch and ongoing introduced, the Committee is pleased that