Risk management is a fundamental element of the Group’s business practice on all levels and is embedded into the business planning and controlling processes of the Group. Material risks are monitored and regularly discussed within the Risk and Compliance Committee and the Audit Committee of the Board of Directors.
The Risk and Compliance Committee led by the CEO and comprising the CFO, the Chief Compliance Officer, the Head of Internal Audit, and the Group General Counsel as members, monitors the risk profile of the Group and the development of essential internal controls to mitigate these risks.
The Group carries out an annual risk assessment. In conformity with the Swiss Code of Best Practice for Corporate Governance, the Group’s risk management system covers both financial and operational risks.
A risk is defined as the possibility of an adverse event which has a negative impact on the achievement of the Group’s objectives.
Risk management is incorporated within the ICS. Preventive, risk-mitigating measures to control risks are proactively taken at different levels and are an integral part of management responsibility.
An independent risk assessment procedure was adopted for operational risks. The Regional Management was interviewed in order to assess the risks for each country in their respective region. In addition, Management Board members assessed the overall strategic risk exposure of the Group. Within the framework of the corporate governance process, the updated risk assessment was then presented to the Audit Committee of the Board of Directors.
Financial risks analysis and assessment were carried out by the finance and accounting department.
The following risk areas have been identified amongst others and mitigating actions are implemented:
A continuous dialogue between the Management Board, Risk and Compliance Committee and Audit Committee is maintained in order to assure the Group’s effectiveness in this area. The risk management system is governed by the Risk Assessment Guideline defining the risk groups and sub-groups, the structure and the process of risk assessments. The risk catalogue is reviewed regularly and critical analysis ensures a continuous development of the risk management system.
In the 2016 business year no significant risks were identified that would have the potential to substantially negatively impact the Group and its future development.
The most material risks remain the uncertainty of the global economic development, the geopolitical instability, volatile currency fluctuations and the financial markets, thus being in the constant focus of the management.