263 Life Is On | Schneider Electric www.se.com Chapter 3 – How we manage risk at Schneider Electric Strategic Report 3. Competition for attracting and recruiting talent in a tight labor market is intense, in particular for critical digital and technical skill sets in key markets. Accelerating skill development (upskilling and reskilling) of employees and the development of leaders who can build human connections in a digital world is also necessary to reduce the risk of skill gaps and bring greater organizational agility. Risk monitoring and management The Group has a number of initiatives and programs in place to mitigate these risks, anchored in the Group’s People Strategy, at the heart of which is the Employee Value Proposition, the Core Values and Leadership Expectations 2.0. Schneider’s approach focuses on the end-to-end talent pipeline from hiring to rewarding to developing for all employees as well as critical talent segments from a workforce size, quality, diversity, and velocity perspective. This systematic approach allows for data-driven monitoring of key gaps and risks. Supporting initiatives and programs include: • Annual performance and development goal setting and reviews, as well as talent reviews – culminating in year-end reviews of pipeline, succession, diversity, and skills by each entity with the Chairman & CEO and Chief Human Resources Officer. Overall health of the talent attraction and development strategy, leadership pipeline, as well as succession of key people and positions is reviewed monthly with the Executive Committee; • A five-year ambition to grow the early-career pipeline by 2x including internships, trainees, apprenticeships, and fresh graduates. For example, the Schneider Global Student Experience and the Schneider Go Green annual competition each year attracts thousands of university talents; • Investing in a new talent acquisition platform to manage prospective talents and the hiring processes, providing a seamless digital experience and enabling the Group to compete in the market for top talent. To date this has resulted in a 1,000% increase in talents joining the talent network; • An 50/40/30 ambition towards gender: 50% of women in hiring, 40% in frontline management, and 30% in leadership (Vice- President and above); • Policies for family leave, pay equity, and flexible “new ways of working”, supplemented with a strong program of activities to accelerate the diversity, equity, and inclusion agenda and focus on employee well-being, especially mental health; • A multi-hub operating model enabling customer proximity, innovation, speed, collaboration, and diversity of talent opportunities; • Career development focus for all employees, leveraging Open Talent Market for internal mobility and anchored in an annual performance and development review; • Programs for specific segments of talent including early talent, experts, high-potential talent, and talent in the later stages of their professional career; • Upskilling for today and tomorrow with a strong focus on digital skills, technical skills, commercial excellence, and functional expertise, led by Global learning academies of experts; • A collective focus for leaders to disrupt, accelerate, coach, and collaborate in order to transform culture and build great teams; • Continuous listening strategy to seek feedback from employees throughout their employment lifecycle. 3. Management practice risks 3.1 IT systems management Risk description The Group operates either directly or through service providers, a wide range of highly complex information systems, including servers, networks, data repositories, applications, and databases with three targeted landing zones, on premise, co-location hubs, and in the cloud, that are essential for the efficiency of its sales and manufacturing processes, as well as platforms to enable digital offers such as EcoStruxure ™ . The Group is deploying various applications aimed at enhancing commercial experience, employee experience, and supply chain efficiency as well as enabling digital commercial offers. Significant failure in fulfilment by a service provider or a major network outage, hardware and/or system failure could adversely affect the quality of service offered by Schneider Electric. In addition, the provision of safe and secure foundational Information Systems is critical to the ongoing expansion of digital offers and customer interactions. As the Group moves towards more digital offers, services, and software, the variety of legacy systems makes it harder and more complex to evolve and scale. Despite the Group’s policy of establishing governance structures and contingency plans, there can be no assurance that information systems projects will not be subject to technical problems and/ or execution delays. While it is difficult to accurately quantify the impact of any such problems, data loss, or delays, they could have an adverse effect on inventory levels, service quality, and, consequently, on the Group’s financial results.