We believe that dealing responsibly with potential risks and taking them into account appropriately in all business processes is the basis of any sound corporate management. At the same time, we feel it is important not just to reliably identify, but also seize business opportunities. Our opportunity and risk policy enables us to do precisely this and to further develop the company and create value without exposing it to undue risks. Our Board of Management is responsible for the strategic direction of our risk management. In addition to formulating risk policy principles this also includes the profit-oriented management of overall risk. The Supervisory Board is responsible for exercising responsibilities under company law. The Board of Management regularly informs the Supervisory Board in a standardized report about decisions that are relevant in terms of risk. The adjacent figure shows the responsibilities in connection with risk management organization.
Identifying, assessing and minimizing risks
We identify potential risks at an early stage within the scope of continuous risk monitoring and a risk management and reporting system geared to the corporate structure in terms of company law. In this context, we focus particularly on such risks that arise as a result of strategic decisions and that may threaten the company’s continued existence. It is also of paramount importance to us that our business activities do not pose any risk to people, the environment and society. We responded to the risk to our employees’ health from the novel coronavirus at an early stage, among other things by setting up a crisis committee. We took early warnings very seriously and decided on important steps as early as February 2020. In cooperation with our company physicians, we drew up a pandemic plan valid across the entire company and put corresponding hygiene regulations in place by March 2020. The protective measures were reviewed on an ongoing basis, regularly adapted to changing developments and consistently communicated. This enabled us to make a decisive contribution to protecting our employees during the pandemic through planned and consistent action, while at the same time keeping processes running smoothly.
Responsibilities in connection with risk management organization
We categorize all risks into five clearly defined risk areas. In addition to financial risks, we are exposed to market risks, political, legal, and social risks, strategic risks as well as performance and infrastructure risks. The last three categories in particular cover potential risks associated with sustainability and our CSR policy. To provide as much transparency as possible, our risk report states not only the subjective gross expected value, but also additionally shows the respective value according to various evaluation scenarios (best – expected – worst case) and their probability of occurrence. Furthermore, the risk report describes the measures defined by our risk manager and their impacts on the risk. For more information about our opportunity and risk management, see the Financial Report 2020.
The relevant management groups in the divisions are regularly notified of identified risks and measures defined to counter them. The Board of Management also receives quarterly reports and the Supervisory Board is reported to at its ordinary meetings. Four such meetings were held in the reporting year. No material risks with very likely serious negative impacts on matters relating to sustainability and the national CSR policy were or are known to us for the 2020 financial year. Regarding the impacts of the coronavirus pandemic on equity and the operating result, please see the Financial Report 2020.