Risk Management

Board and executive management oversight

Henry Schein’s management has a longstanding commitment to employing and embedding risk management practices and disciplines into its business planning and management processes throughout the Company to better enable achievement of the Company’s strategic, business, operational, financial, sustainability, and compliance objectives as well as to achieve and maintain a competitive advantage in the marketplace. The Company’s Executive Management Committee is responsible for oversight and active management of material1 risks to the Company (including, without limitation, strategic, development, business, operational, human, sustainability, financial, and regulatory risks) as an integral part of the Company’s business planning, succession planning, and management processes. Members of the management team provide periodic reports to the Audit Committee, Compensation Committee, the Regulatory, Compliance and Cybersecurity Committee, and Strategic Advisory Committee on select risk management topics and the Chairperson of each respective committee reports, as appropriate, on these topics to the full Board of Directors. Risk oversight is provided by a combination of our full Board of Directors and by the Board of Directors’ committees.

Enterprise risk management and compliance risk assessments and continual improvement

The Company conducts company-wide risk assessments at least every two years, which include enterprise risk management and compliance. Recently, we performed both an enterprise risk management assessment, and a compliance-focused risk assessment as outlined below. We worked with over 100 key internal leaders – independent Board Members, the Executive Management Committee, and 70 Vice Presidents – to conduct a global interdisciplinary risk assessment to identify the greatest enterprise-wide risks that could affect our business now and in the future. Risk factors were studied across strategic, operational, legal, regulatory, compliance, finance, and technology categories. We reviewed and strengthened strategies and plans and continuous measurement of such programs to address relevant identified factors. We determined that the impact and likelihood of these risks are similar to those of other peer companies articulated in benchmarking studies. Read our 2021 TCFD Report for more detail on how our enterprise risk management process supports our management of ESG issues, including climate matters. In 2020, the Compliance team conducted a broad global compliance risk assessment, working with 113 key internal leaders (including Executive Management Committee members and leaders of the business units), that focused on potential compliance risks covering our global geographies, businesses, and operations. This assessment has served as the basis for continuous improvements in compliance program activities during 2021 and 2022. The results of the biennial compliance risk assessment along with risk mitigation plans are regularly reviewed with the Regulatory, Compliance and Cybersecurity Committee.

Transparency

We support and encourage transparency and accountability in our ESG work and believe in the power of transparency to promote sustainability, generate action and create learnings in all we do. Our performance is disclosed in a number of sustainability and ESG ratings and platforms, including CDP, Ethisphere, Human Rights Campaign Corporate Equality Index, MCSI ESG ratings, Institutional Shareholder Services (ISS), Sustainalytics, CPA-Zicklin Index, and JUST Capital rankings, among others. We also recognize the importance of meeting the recommendations made by TCFD for more effective climate-related disclosures that could promote more informed investment, credit, and insurance underwriting decisions. Our first TCFD report is now publicly available alongside our 2021 CSR Report.