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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Pearson Plc | LSE:PSON | London | Ordinary Share | GB0006776081 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -11.40 | -1.14% | 991.60 | 992.40 | 992.80 | 1,000.50 | 975.80 | 1,000.50 | 1,682,524 | 16:35:29 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Miscellaneous Publishing | 3.67B | 378M | 0.5497 | 18.05 | 6.82B |
From Apr 2019 to Apr 2024
TIDMPSON
RNS Number : 4839A
Pearson PLC
24 March 2017
PEARSON PLC
(the "Company")
In accordance with Listing Rule 9.6.1, Pearson plc has today submitted to the National Storage Mechanism a copy of its Annual Report and Accounts for the year ended 31 December 2016.
The document is available on Pearson's website at https://www.pearson.com/ar2016.html
The document will shortly be available for inspection on the National Storage Mechanism website: http://www.morningstar.co.uk/uk/nsm
The Company also confirms that it will hold its annual general meeting on 5 May 2017. The formal notice to shareholders will be issued on 29 March 2017.
IMPORTANT: EXPLANATORY NOTE AND WARNING
The primary purpose of this announcement is to inform the market about the publication of Pearson plc's Annual Report and Accounts for the year ended 31 December 2016 (the "2016 Annual Report and Accounts").
The information below, which is extracted from the 2016 Annual Report and Accounts, is included solely for the purpose of complying with DTR 6.3.5 and the requirements it imposes on issuers as to how to make public annual financial reports. It should be read in conjunction with Pearson plc's Preliminary Announcement issued on 24 February 2017, which is available on the Company's website at:
https://www.pearson.com/news/media/news-announcements/2017/02/pearson-2016-results.html
Together these constitute the material required by DTR 6.3.5 to be communicated to the media in unedited full text through a Regulatory Information Service. This material is not a substitute for reading the full 2016 Annual Report and Accounts. Page numbers and cross-references in the extracted information below refer to page numbers and cross-references in the 2016 Annual Report and Accounts.
RESPONSIBILITY STATEMENT
"Each of the directors, whose names and functions are listed on p60-61 confirms that, to the best of their knowledge:
-- The Group financial statements, which have been prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Group
-- The strategic report contained in the annual report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.
This responsibility statement has been approved by the board on 14 March 2017 and signed on its behalf by:
Coram Williams
Chief financial officer"
RELATED PARTY TRANSACTIONS
"Joint ventures and associates
Amounts advanced to joint ventures and associates during the year and at the balance sheet date are set out in note 12.
Key management personnel
Key management personnel are deemed to be the members of the Pearson Executive (see page 8). It is this committee which had responsibility for planning, directing and controlling the activities of the Group in 2016. Key management personnel compensation is disclosed below:
All figures in GBPmillions 2016 2015 ------------------------------ ----- ----- Short-term employee benefits 6 7 ------------------------------ ----- ----- Retirement benefits 1 1 ------------------------------ ----- ----- Share-based payment costs 1 1 ------------------------------ ----- ----- Total 8 9 ------------------------------ ----- -----
There were no other material related party transactions. No guarantees have been provided to related parties."
PRINCIPAL RISKS AND UNCERTAINTIES
"The board of directors confirms that is has undertaken a robust assessment throughout 2016 of the principal risks facing the company, in accordance with provision C.2.1 of the 2014 UK Corporate Governance Code.
Our principal risks (as of 31 December 2016)
Listed in the table below are the most significant risks that may affect Pearson's future. A longer list of company-wide key risks, plus emerging risks, was monitored and reviewed throughout the year. The most material risks are those which have a higher probability and significant impact on strategy, reputation or operations, or a financial impact greater than GBP50m, and are identified as principal risks.
The following principal risks also relate to the material issues considered in the 2015 sustainability report: products and services, testing failure, political and regulatory risk, data privacy, information security, customer digital experience, and safety and corporate security. You can read more about sustainability, including a comparison table of sustainability material issues and principal, company-wide and other business risks on p22.
The risk acquisitions, divestments and joint ventures is no longer a principal risk: just as
in 2016, acquisitions are a lower priority in 2017 and not likely to be material. There may be some separation or execution risk with certain divestments, but we do not expect such risk to be material. In 2016, we completed the separation of the FT and we undertook corporate transactions to de-risk the business, which in some cases resulted in exiting countries with greater compliance risk. We expect a similar approach in 2017, looking at ways to reduce our exposure to non-core businesses. We have announced our intention to issue an exit notice to
Bertelsmann regarding the 47% associate interest in PRH with a view to selling the stake or recapitalising the business and extracting a dividend."
Hot Features
Premium
Risk 2016 activities and 2017 plans
------------------------------- ------------------------------------------------------------------------
STRATEGY AND CHANGE
---------------------------------------------------------------------------------------------------------
Business transformation 2016 activities: As highlighted
and change: in the chairman's introduction
The pace and on p4,2016 continued to be
scope of our a year of transformation and
business transformation change for Pearson, supported
initiatives increase by the board. The restructure
our execution and associated cost savings
risk that benefits programme announced at the
may not be fully start of the year was delivered
realised, costs in full in 2016. The first
may increase, implementation of The Enabling
or that our business-as-usual Programme - a programme of
activities may work to deliver a single Pearson-wide
be impacted and solution to integrate our data,
do not perform systems and processes across
in line with HR, finance, procurement and
expectations. supply chain - went live in
the UK.
Key to the success of our change
programmes is the
quality of data (reported as
a separate principal risk in
2015). The unavailability of
timely, complete and accurate
data limits informed decision-making
and increases the risk of noncompliance
with legal, regulatory and
reporting requirements.
Controls
* Project and change management best practices
* Enhanced governance and reporting, including monthly
updates on the most significant change initiatives to
the Pearson executive, board and audit committee
* Monthly assurance reporting on the programmes.
2017 plans: In 2017, business
transformation and change
initiatives will be supporting
our strategic goal to accelerate
our digital transition in higher
education, to manage the print
decline, and to reshape our
portfolio.
A key pillar in our strategy,
as emphasised in the CEO's
strategic overview on p7, is
underpinning our content and
assessment with our technology
and services. We are speeding
up work to simplify our global
learning platform and enhancing
our courseware service capabilities.
We will also continue with
the next phase of The Enabling
Programme to further progress
the simplification of our business
(the importance of which our
chairman highlights on p4),
reduce costs and improve our
data capabilities. The focus
will be on customer and product
master data as core
to all systems and businesses.
See CEO's strategic overview
on p6-9.
------------------------------- ------------------------------------------------------------------------
Products and 2016 activities: This risk
services: remains one of our highest
Failure to accelerate as it is central to our growth
our shift strategy. The end of 2016 saw
to digital by unprecedented declines in our
developing and US higher education
delivering (to courseware business (as described
time and quality) in full in the Performance
market leading section on p38) which we failed
global products to adequately anticipate and
and services build into our forecasts.
that will have
the biggest impact Significant activity took place
on learners and in 2016 to mitigate this risk
drive growth; and support the growth of Pearson.
ensuring Pearson We have combined our lines
offers products of business for courseware
to market at into a single product organisation,
the right price as well as rationalised and
and with a deal integrated our product development
structure that capabilities to focus on learning
remains competitive and user experience design,
as well as supports and more adaptive, personalised
our strategy. learning in next generation
courseware and online services.
In 2016, we completed initial
portfolio reviews on global
school, US higher education
courseware and higher education
managed services, capturing
opportunities for shifts in
focus and better differentiation.
The Global Product Lifecycle
continues to be embedded across
Pearson to enable visibility
and transparency into our product
investment decisions using
the Global Product Lifecycle
stages and gates, data-driven
decision-making and incremental
funding principles.
Controls
* Separate school, higher education and English product
teams brought together into one global product
organisation
* Product Development Lifecycle
* Product and portfolio councils launched
* Product portfolio management approach and benefits
articulated.
2017 plans: Turning this risk
into an opportunity - successfully
accelerating our shift to digital
as well as investing in and
delivering the right products
and services - is
key to successful business
performance in 2017.
In the CEO's strategic overview
on pages 6-9, we have laid
out our strategy in more detail.
Key elements that relate to
the products and services risk
are:
Accelerating work to simplify
our product learning platform
and enhancing our courseware
service capabilities with GBP50m
of additional investment, which
will remove barriers to faster
product innovation, accelerate
our product roadmap by two
years and drive faster adoption
of institution-wide digital
direct access for Pearson courseware.
Increasing our participation
in the courseware rental market,
by:
a. Reducing eBook rental prices
by up to 50% across
2,000 titles - making digital
rental the best option for
price-conscious students,
b. Launching our own print
rental programme, piloting
with an initial group of 50
titles made available through
Pearson's approved rental partners,
and ensuring Pearson is paid
more often for the usage of
our courseware. If successful,
we
will scale this programme rapidly.
See Develop digital & services
on p14.
------------------------------- ------------------------------------------------------------------------
Talent: 2016 activities: The restructure
Failure to attract, and associated cost savings
retain and programme announced at the
develop staff, start of the year was delivered
including adapting in full in 2016.
to new skill
sets required We have successfully recruited
to run the business. in-demand skill sets in support
of our strategic goals to accelerate
the shift to digital, including
the appointment of global leaders
to lead both the business and
the transformation eff orts
in North America.
Throughout the year, we have
continued to promote
our internal talent filling
45% of our open roles with
internal staff.
Controls
* Globally consistent performance, talent and
succession management approaches established
* Annual global employee engagement survey conducted
with follow-up action plans in place
* Retention data is monitored on a monthly basis
* Exit interviews are conducted and monitored globally
to identify any trends and concerns
* Learning programmes now offered on a single platform
with access to new content for all staff.
2017 plans: Over 60% of our
staff completed the engagement
survey. The results of the
survey have been shared with
all line managers and action
planning will take
place at the start of 2017.
Each member of the Pearson
executive will work in partnership
with human resources and corporate
affairs to build business-level
action plans.
See p23 in Sustainability for
more on the engagement survey.
Oversight of succession plans
and development planning has
been improved with rigorous
quarterly talent reviews implemented
for 2017.
Further learning programmes
will be launched within our
Pearson U learning platform
with a strong emphasis on leadership
and technology.
------------------------------- ------------------------------------------------------------------------
Political and 2016 activities: Work was undertaken
regulatory risk: in 2016 to ensure that we can
Changes in policy more proactively identify and
and/or regulations mitigate political/ regulatory
have the potential risk that had the potential
to impact business to impact Pearson globally;
models and/or bringing greater co-ordination,
decisions across clarity and consistency to
all markets. our work; building political
and institutional relations,
and increasing our ability
to receive and respond to external
intelligence.
In June 2016, a UK referendum
voted in favour of leaving
the EU. A risk assessment of
impacts arising from this was
carried out and continues on
an ongoing basis. There has
been no significant downside
for Pearson identified so far
following the result of the
referendum. The main risk arising
at this stage for Pearson is
the resulting overall uncertainty.
2017 plans: Following the inauguration
of a new President of the US,
in 2017 Pearson will continue
to implement its state strategy
which will ensure engagement
with new office holders. We
will build on the groundwork
already done in Washington,
DC and state capitals throughout
the US to position Pearson
as a leader in the education
space and to establish the
company as a key partner for
Governors and state legislators
as they pursue their economic
agendas. This work will focus
on Congress, the Administration,
and in
priority state capitals.
In the UK, 2017 is a year of
major qualification and accountability
changes. Our focus is on working
with government, regulator
and other stakeholders to
demonstrate the professionalism
and solidity of the system.
We have increased engagement
with Department for Education
officials ahead of major periods
of change (key moments include
summer Key Stage 2, GCSE and
A Level 2017 results).
We will continue to assess
the potential impacts of the
UK's decision to leave the
EU as the model that will replace
our membership becomes clearer.
------------------------------- ------------------------------------------------------------------------
OPERATIONAL
---------------------------------------------------------------------------------------------------------
Testing failure: 2016 activities: Pearson is
Failure to deliver an education content, assessment
tests and and related services company
assessments and and, as such, managing this
other related risk remains a priority. In
contractual requirements the UK, the summer
because of operational exam series was delivered more
or technology smoothly than the previous
issues, resulting year as a result of mitigating
in negative publicity actions taken. Action plans
impacting our were put in place for US schools
brand and reputation. assessment, for example to
mitigate against future outages
and disruption.
Controls
We seek to minimise the risk
of a breakdown in our student
marking systems with the use
of:
* Robust quality assurance procedures and controls
* Oversight of contract performance
* Investment in technology, project management and
skills development of our people, including software
security controls, system monitoring, pre-deployment
testing, change controls and the use of root cause
analysis procedures to learn from incidents and
prevent recurrence.
2017 plans: Investigation is
under way to mitigate risks
around compatibility and responsiveness
of our assessment
tools by using cloud and web
services.
The migration and retirement
of legacy systems in use will
continue.
Plans are being developed to
upgrade Pearson's bespoke online
marking system - ePEN in the
UK in 2017 and to continue
with mitigating actions put
in place in the 2016 summer
series in the meantime.
------------------------------- ------------------------------------------------------------------------
Safety and Corporate 2016 activities: Good progress
security: was made in 2016 towards achieving
Risk to safety our three-year health and safety
and security strategy. The
due to increasing implementation of health and
local and global safety standards continued,
threats. plus health and safety reviews
have now been formally included
in management review processes
in our businesses.
During 2016, the travel security
programme was reviewed and
a revised process implemented
to include improved traveller
communications.
The Travel ASSIST app was also
updated to allow access for
the circa 44,000 associates,
including assessors, examiners
and validators, who will be
able to see their itinerary,
country information and alerts.
The importance of continuing
to develop and extend this
was evidenced during the Hoboken
train incident in September
2016, when 37 travellers in
the area were successfully
contacted via the travel management
tool.
Controls
* Up-to-date global health and safety policy in place
* Management review processes are established with key
leadership groups
* Incident data collected globally every six months.
2017 plans: The ongoing focus
of health and safety will be
the implementation of the three-year
strategy which in
2017 will include enhancing
our incident reporting procedures
and processes globally.
Travel security improvements
will continue towards automation,
smoother communications and
feedback from travellers. Security
risk assessments will take
place to review physical security
measures at key facilities,
and a corporate security policy,
strategy and guidelines will
be delivered.
------------------------------- ------------------------------------------------------------------------
Safeguarding 2016 activities: We continue
and protection: to take safeguarding as a fundamental
Failure to adequately obligation to our young learners
protect and a high priority.
children and
learners, particularly Safeguarding training was reviewed
in our direct in 2016 and indicated good
delivery businesses. take-up and positive feedback
regarding the content. Safer
Schools materials have been
developed in partnership with
University College London (UCL),
which will be rolled out to
the relevant businesses, and
development of a sexual
harassment policy for our further
education businesses commenced.
Controls
* Safeguarding committee established
* Metrics regarding safeguarding reports and training
collected
* Safeguarding policy and training.
2017 plans: We will continue
to develop and question our
practices around safeguarding
in 2017, including developing
external validation for our
safeguarding strategy. The
Safer Schools materials will
be implemented in relevant
businesses, as will the new
sexual harassment policy.
------------------------------- ------------------------------------------------------------------------
Customer digital 2016 activities: Managing this
experience: risk is critical to achieving
Challenges with our
reliability and strategic goal of accelerating
availability our shift to digital products
of customer facing and services, and crucially,
systems could becoming a trusted partner.
result in incidents We will only succeed if robust
of poor customer platforms and responsive customer
digital experience support service underpin our
and impact our content, assessment and services.
customer service
responsiveness. The risk increased in 2016
due to the fact that, despite
a comparably good customer
back-to-school in 2016, there
were issues in the area of
our subscription management
system (SMS) which negatively
impacted our North American
customers 'ability to easily
access our systems. The initial
issues have been addressed.
Controls
* Real-time monitoring of systems (for service
disruptions) and reporting of operational performance
used to identify issues
* Project management disciplines in place to ensure
enhancements and new products meet required
standards.
2017 plans: Further investment
is being made in 2017 in our
global learning platform with
products being developed on
it for testing. Read more on
this in 'our strategy in action'
section on p14-15.
Mitigations are being put in
place to prevent a reoccurrence
of the 2016 back-to-school
issues for customers, which
are described further in the
Develop digital and services
section on p15.
Continued focus on customer
service quality and responsiveness
with specialised service for
specific customer groups. We
continue to invest in training
agents to ensure that they
are ready to handle the broad
range of issues faced by learners
and educators. We have also
improved escalation
processes so that we can be
more responsive to complex
issues that require engagement
from product engineering teams.
------------------------------- ------------------------------------------------------------------------
Business continuity: 2016 activities: A revised
Failure to have business resilience policy
plans in place and supporting guidance was
or plans are developed in 2016, identifying
not properly our
executed. Crisis exposure and risk as they relate
management and to key products, sites, services
technology disaster and supply chain. A common
recovery (DR) crisis management framework
plans may not was implemented, with training
be comprehensive and scenario sessions running
across the whole during 2016.
enterprise.
Pearson won an external award
for Business Continuity/Resilience
Team of the Year, in recognition
of the ongoing eff orts and
shifting focus from traditional
business continuity towards
resilience management.
Technology incidents are dealt
with reactively and proactive
closure of known DR gaps is
prioritised based upon the
importance of products and
systems. Data centres are being
consolidated, including greater
use of cloud solutions. A schedule
is in place for testing the
DR of data centres.
Controls
* Business resilience governance group has been
established, meeting quarterly, with senior leaders
from across the business
* Key enterprise systems developed during 2016 (the
Enabling Programme, oneCRM, and Identity and Access
Management) have all been delivered with 'high
availability' requirements to provide resilience
* Product Lifecycle includes an explicit checkpoint to
ensure appropriate resilience is built into new
products.
2017 plans: Key Pearson locations
identified that will be the
priority for 2017 to ensure
business resilience plans are
in place and tested.
Crisis management training
will continue across 2017.
Work continues to address any
gaps in the DR arrangements
for legacy systems where appropriate.
Further data centre consolidation
and migration to cloud services..
------------------------------- ------------------------------------------------------------------------
FINANCIAL
---------------------------------------------------------------------------------------------------------
Tax: 2016 activities: This risk
Legislative change has slightly increased during
caused by the 2016 due to pending legislative
OECD Base Erosion changes, and the definition
and Profit Shifting of the
initiative, the risk was reworded to take into
UK exit from account the external focus
the EU, US tax on transparency, linked to
reform or domestic greater scrutiny and the potential
government initiatives, for reputational damage. Plans
potentially in are being put in place to manage
response to the the implementation of these
ongoing EU anti legislative changes.
tax abuse
activities, results Controls
in a higher
effective tax * Our tax strategy reflects our business strategy and
rate, double the locations and financing needs of our operations.
taxation and/or In common with many companies, we seek to manage our
negative reputational tax affairs to protect value for our shareholders, in
impact. line with our broader fiduciary duties. We are
committed to complying with all statutory obligations,
to undertake full disclosure to tax authorities and
to follow agreed policies and procedures with regard
to tax planning and strategy
* Oversight of tax strategy is within the remit of the
audit committee, which receives a report on this
topic at least once a year. All of the audit
committee members are independent non-executive
directors. The chief financial officer is responsible
for tax strategy; the conduct of our tax affairs and
the management of tax risk are delegated to a global
team of tax professionals. See p133 for details of
tax accounting policy.
* Media and public scrutiny on tax issues continues to
be actively monitored by group tax and corporate
affairs.
2017 plans: Continued close
monitoring with advisers on
proposed and potential legislation
changes and possible impacts.
Potential impact of the UK's
decision to leave the EU, and
the inauguration of a new President
in the US are being closely
monitored. There could be significant
changes to the US and UK tax
regimes including VAT and withholding
tax. It is too early to know
what these changes will be,
or any impact
they may have.
Media and public scrutiny on
tax issues will continue to
be actively monitored by group
tax and corporate affairs.
------------------------------- ------------------------------------------------------------------------
Treasury : 2016 activities: Treasury slightly
Failure to manage increased in 2016 and remains
treasury a major risk as Pearson has
financial risk net debt of GBP1.1bn which
(e.g. FX, interest periodically needs refinancing,
rate, counterparty and faces the possibility of
and operational the loss of cash balances in
risk). the event of a bank failure.
Pearson also faces the possibility
of losses due to changes in
FX or interest rates adversely
affecting the organisation.
However, the probability of
a major issue is relatively
low due to the spread of debt
maturities, the cautious approach
to counterparty credit risk
and the strong liquidity position.
Pearson finished the year with
over GBP1bn of cash and sufficient
access to funds to be able
to repay its $850 million in
maturities in 2018 with the
additional possibility of
funds from the PRH disposal
or recapitalisation.
The potential impacts of the
UK's exit from the EU, such
as market and FX volatility,
were closely monitored throughout
2016 (which will continue in
2017).
2017 plans: During January
2017, the Group's credit ratings
with Moody's and Standard and
Poors were modified from Baa2/BBB
(stable) to Baa2/BBB (negative
outlook). This is not expected
to restrict short-term capital
market access if this was required.
In 2017, we will continue to
operate in line with our treasury
policy. More on this can be
found in note 19, starting
on p160.
------------------------------- ------------------------------------------------------------------------
LEGAL AND COMPLIANCE
---------------------------------------------------------------------------------------------------------
Data privacy 2016 activities: Risk concerning
and information cyber security and data privacy
security: remains high due to complex
Risk of a data external factors,
privacy incident including increasingly sophisticated
or other failure attack strategies, as well
to comply with as Pearson's ongoing transition
data privacy to digital products, services
regulations and and cloud adoption.
standards; and/or
a weakness in There are also upcoming increased
information security, regulatory obligations under
including a failure the new EU data privacy law,
to prevent or the General Data Protection
detect a malicious Regulation (GDPR), which will
attack on our apply from May 2018 and introduce
systems, could more onerous privacy obligations
result in a major and more stringent penalties
data privacy for non-compliance. The data
breach causing privacy and information security
reputational offices worked together
damage and financial in 2016 on the bulletproofing
loss. and critical product programme
to ensure that appropriate
security and privacy controls
are built in.
Data privacy
Actively worked to mitigate
the risk through continued
eff orts on our privacy programme,
in particular the roll-out
of global policies and training,
deploying new vendor and programme
privacy impact assessment processes,
and developing
specialist privacy toolkits
to help employees better manage
privacy risks.
Controls
* Established data privacy office
* Data privacy policy and annual training
* Monitoring by the Data Privacy Council
* Privacy impact assessments in place.
Information security
The information security programme
continued in 2016 to close
gaps where risk has been identified,
such as undertaking security
impact assessments and putting
in place remediation plans.
Work continued towards global
PCI compliance to avoid potential
for severe fines and potential
loss of contract revenue.
Controls
* Established information security office
* Up-to-date security policies and awareness training
in place
* Ongoing monitoring for potential malicious attacks on
our infrastructure and systems
* Ongoing firewall management activities
* Automated security exception management
* Vendor contract reviewed and approved for appropriate
security controls.
2017 plans: The data privacy
and information security
improvement programmes that
commenced in 2015
will continue throughout 2017
and will implement
critical processes to drive
best practices.
The joint activity on bulletproofing
and critical products programme
will continue, for example
ensuring that the new global
learning platform is 'secure
by design'.
The data privacy programme
will progress changes required
to comply with the GDPR ready
for it to take effect in May
2018. As Pearson operates across
several EU Member States, Pearson
will still need to comply with
GDPR even when the UK leaves
the European Union. The data
privacy office will continue
to monitor plans for the UK's
departure
from the EU and, if necessary,
will adapt its privacy
programme to take into account
any new UK-specific privacy
developments.
------------------------------- ------------------------------------------------------------------------
Intellectual 2016 activities: In 2016, we
property including rolled out the new Pearson
rights, permissions brand with its protection greatly
and royalties: improved by expanding word
Failure or lack mark protection to 80 new countries
of practical and filing for logo in 150
ability to adequately countries. A global brand database
manage, procure was also fully implemented
register, monitor, to support this. The patent
protect and/or governance programme was revamped
properly license in 2016 and a stronger framework
our intellectual to protect intellectual property
property rights (IP) was established.
(including patents,
trademarks and Work began in 2016 to evaluate
general copyright) new royalty and business practices.
in our brands, We also began to implement
content and technology a global three-tier strategy
may prevent us guiding third-party assets
from enforcing (e.g. images, text, rich media)
our rights against rights acquisition as well
competitors' as a more stringent rights
to protect our review and reclearance process.
market share.
Controls
Failure to obtain
permissions, * Policies in place to manage and protect our
or to comply intellectual property
with the terms
of
permissions,
for copyrighted * Cooperation with trade associations
or otherwise
protected materials
such as photos
resulting in * Monitoring of technology and legal advances
potential litigation;
risk of authors
alleging improper
calculations * Patent programme in place.
or payments of
royalties.
2017 plans: We will continue
to streamline our portfolios;
procure and register expanded
rights in our high-value IP
globally, including aggressively
expanding our patent portfolio;
monitor activities and regulations;
and proactively enforce our
rights, taking necessary legal
action.
In 2017, we will start to implement
the newly developed royalty
and business practices. A new
rights management system is
being developed for roll-out
in the UK, US and Canada during
2017 and 2018.
------------------------------- ------------------------------------------------------------------------
Anti-bribery 2016 activities: Internal procedures
and corruption and controls, including training,
(ABC): continue to improve, which
Failure to effectively should mitigate the
manage risks impact as part of an 'adequate
associated with procedures' defence, in the
compliance to event that an undetected ABC
global and local matter arises.
ABC legislation.
The audit committee reviewed
the results of a self-assessment
of the ABC programme, supplemented
by internal audit and external
independent review (see p72).
Overall, this indicated an
effective framework to be in
place.
Pearson's ABC infrastructure
includes a network of local
compliance officers based in
country, being mainly members
of the legal team. These officers
have assumed responsibility
for ABC compliance in their
respective businesses, and
function as the 'eyes and ears'
of the organisation with the
oversight of the central compliance
and legal teams.
In addition to ongoing face-to-face
training for higher risk groups,
a compliance awareness campaign
took place in December 2016
which included ABC, to coincide
with UN International Anti-Corruption
Day. ABC certification was
rolled
out across all higher risk
markets in 2016.
Controls
* Policy and guidance updated, although no change to
Pearson's 'zero tolerance' principle
* Code of Conduct certification and training in place,
which includes a clear statement of ABC policy
* Business Partner Code of Conduct, emphasising ABC
compliance
* Local Compliance Officer programme in place and
proving successful.
2017 plans: Continue risk assessments
in 2017 to ensure that the
ABC programme continues to
reflect local market and business
model risks.
Further develop and deploy
risk-based third-party due
diligence and monitoring.
Leverage The Enabling Programme's
systems and processes to automate
and embed improved preventive
and detective controls relevant
to ABC.
------------------------------- ------------------------------------------------------------------------
Competition law 2016 activities: A policy,
: general training plus supporting
Failure to comply guidance were developed in
with anti-trust 2016, containing all the measures,
and competition indicators and actions required
legislation could to ensure anti-trust
result in costly and competition compliance.
legal proceedings
and/or adversely Controls
impact our reputation.
* Policy and guidance published
* Lawyer network launched across Pearson
* Ongoing training and awareness initiatives.
2017 plans: Employee training
will continue throughout
2017 and risk assessments are
ongoing to monitor compliance
with anti-trust and competition
legislation.
------------------------------- ------------------------------------------------------------------------
LEGAL NOTICE
"Except for the historical information contained herein, the matters discussed in this document include forward-looking statements. In particular, all statements that express forecasts, expectations and projections with respect to future matters, including trends in results of operations, margins, growth rates, overall market trends, the impact of interest or exchange rates, the availability of financing, anticipated costs savings and synergies and the execution of Pearson's strategy, are forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will occur in future. They are based on numerous assumptions regarding Pearson's present and future business strategies and the environment in which it will operate in the future. There are a number of factors which could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including a number of factors outside Pearson's control. These include international, national and local conditions, as well as competition. They also include other risks detailed from time to time in Pearson's publicly-filed documents and you are advised to read, in particular, the risk factors set out in this document. Any forward-looking statements speak only as of the date they are made, and Pearson gives no undertaking to update forward-looking statements to reflect any changes in its expectations with regard thereto or any changes to events, conditions or circumstances on which any such statement is based. Readers are cautioned not to place undue reliance on such forward-looking statements."
This information is provided by RNS
The company news service from the London Stock Exchange
END
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