Why we manage risks
Our objectives for Risk Management
Our objective is to adopt an approach to business risks that minimises negative impacts and maximises positive impacts, while always taking into account the necessary balance between risk exposure and mitigation costs.
We promote local entrepreneurship and, consequently, offer scope to the management to exercise the associated discretionary powers.
Properly designed and implemented risk management and internal control systems significantly reduce, but cannot fully eliminate, the possibility of human errors, poor judgement, deliberate circumvention of controls, fraud or infringements of laws, rules or regulations, or the occurrence of unforeseeable circumstances.
Key risks
| Strategic | Operational | Financial & reporting | Compliance |
|---|---|---|---|
| Market disruption/decline | Sourcing issues and/or purchase price increases | Cost increases or effiency losses are not transferred to the customer | Unfavorable changes in laws & regulations |
| Unsuccessful long-term strategy or unsuccessful implementation of long-term strategy | Uncertainties of (global) socio-economic and political conditions | Customer-related risk | Employee health and safety |
| Unable to attract and retain qualified personnel | Significant order volume fluctuation/decline or project cancelation |
How we manage risks
Our approch to Risk Managment
Effective risk management is key to executing our strategy, achieving long-term value for our stakeholders, protecting the company’s reputation and ensuring good corporate governance.
The Executive Board is responsible for identifying, assessing and managing the risks associated with our strategy and activities, including establishing the risk appetite, implementing and maintaining the internal risk and control system and supervising its performance. The Executive Board strives to balance business opportunities with the reasonable expectations of shareholders, employees, regulators and other stakeholders. At the enterprise level, the Executive Board, together with the senior management of the holding, business units and operating companies, conduct an annual risk review.
At operational level, our companies make active use of quality systems designed to assess and improve its processes. Virtually all companies have been awarded ISO certification, and possess the relevant safety and quality certificates.