Find the principal risks in an annual report and read how each is handled
The key risks section, often titled principal risks and uncertainties, is where the board names the threats it believes could most damage the business and explains how it manages them. It is usually a table or a set of short entries in the front half of the report, sometimes with a heat map and an arrow showing whether each risk is rising. Ask Search+ "What are the principal risks, and which ones are rated as increasing?" and the answer cites the entries so you can read the company's wording.
Creating an account needs no payment.
Last updated October 2026
How to find key risks with Search+
- Upload the report, plus last year's if you have it
The risk section is most useful read against the previous year. Add both annual reports, typically the PDFs from the investor relations page, so a question can pick up new, removed or re-rated risks.
- Ask about each kind of risk separately
Ask about strategic, operational, financial and compliance risks as separate questions, or about one named risk at a time, such as cyber or a key supplier. Each risk entry usually has its own description, mitigations and trend, and a narrow question keeps them apart.
- Follow the risk into the rest of the report
Risks often point elsewhere: the viability statement, the audit committee report or a note on financial risk management. Ask a follow-up about the linked section so its citation sits beside the risk entry.
Questions to ask about key risks
What principal risks does the board identify this year, and how does it describe each one?
Which risks does the report mark as increasing, stable or decreasing compared with last year?
What actions does the company describe to manage its risk around reliance on a small number of customers?
Which risks in this year's report were not in last year's principal risks section?
Does the report state the board's risk appetite for any of these risks, and how is it described?
Does the report list emerging risks separately from principal risks, and what are they?
What to look for in the key risks section
In UK and European annual reports, principal risks normally sit in the strategic or management report, after the business review and before governance. Reports elsewhere may place them in a risk management section or alongside the financial review. Some reports repeat a short version near the front and give full detail later.
A typical entry gives the risk, its possible impact, the mitigations in place, a link to strategy and a trend indicator. An answer that only names the risk leaves out most of what the board says.
Principal risks are the ones the board considers most significant now. Emerging risks are newer or less understood and may be listed separately, so ask about both.
Additions, removals and changes in trend arrows are often the most informative part of the section. They are easy to miss without last year's report beside this one.
Compared with a regulatory filing's long risk factor list, the annual report usually gives a shorter, board-selected set. Expect fewer entries and more about mitigation.
Search+ answers with inline citations to the risk entries it used, with page references when the PDF has them, and AI answers can be incomplete, so read the cited entry before you rely on it.
Risk section wording and what to ask next
| Wording you may see | What it usually signals | A follow-up question |
|---|---|---|
| "principal risks and uncertainties" | The board's selected list of most significant risks | How many principal risks are listed, and which are new? |
| "risk trend: increasing" | The board sees this risk rising | What reason does the report give for the higher rating? |
| "emerging risk" | A newer risk being monitored | What is the company doing to understand this emerging risk? |
| "mitigating actions" | Controls or plans to reduce the risk | Which mitigations are new this year? |
| "risk appetite" | How much of this risk the board accepts | Is the stated appetite low, moderate or high for this risk? |
| "viability statement" or "going concern" | A link from risks to the company's longer-term outlook | Which risks were modeled in the viability or going concern assessment? |
What is the key risks section of an annual report?
The key risks section is the part of an annual report where the board sets out the principal risks it believes could seriously affect the company's strategy, performance or solvency, along with how each risk is managed and whether it is growing.
Key risks questions
Can Search+ list every principal risk in an annual report?
Can it read the trend arrows in a risk heat map?
How do I find risks that were dropped from this year's report?
Does it connect risks to the auditor's key audit matters?
Can it judge whether a company's risks are acceptable?
Know what the board is worried about
Start a workspace, upload the annual report, and ask which risks are rising.
Start a workspace