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Consolidated Financial Report |
DIRECTORS’ REPORT
2014 Annual Report
Prysmian Group
88
RISK FACTORS AND UNCERTAINTIES
The policy of value creation that motivates the Prysmian
Group has always been based on effective risk management.
Since 2012, by adopting the provisions on risk management
introduced by the "Italian Stock Exchange Self-Regulatory
Code for Listed Companies - Ed. 2014" (Self-Regulatory
Code), Prysmian has taken the opportunity to strengthen
its governance model and implement an advanced system
of Risk Management that promotes proactive management
of risks using a structured and systematic tool to support
the main business decision-making processes. In fact,
this Enterprise Risk Management (ERM) model, developed
in line with internationally recognised models and best
practice, allows the Board of Directors and management to
consciously evaluate the risk scenarios that could compro-
mise achievement of the strategic objectives and to adopt
additional tools able to anticipate, mitigate or manage
significant exposures.
The Group Chief Risk Officer (CRO), designated to govern
the ERM process, is responsible for ensuring, together
with management, that the main risks facing Prysmian
and its subsidiaries are promptly identified, evaluated and
monitored over time. A special Internal Risk Management
Committee (consisting of the Group's Senior Management)
also ensures, through the CRO, that the ERM process is
developed in a dynamic way by taking account of changes
in the business, of needs and events that have an impact on
the Group over time. The CRO reports periodically (at least
twice a year) on such developments to the top management.
Please refer to the "Corporate Governance" section of this
report for a discussion of the governance structure adopted
and the responsibilities designated to the bodies involved.
The ERM model adopted (and formalised within the Group
ERM Policy issued in accordance with the guidelines on the
Internal Control and Risk Management System approved
by the Board of Directors on 25 February 2014) follows a
top-down approach, whereby it is steered by Senior Man-
agement and by medium to long-term business objectives
and strategies. It extends to all the types of risk/opportunity
for the Group, represented in the Risk Model - shown in the
following diagram - that classifies the risks of an internal or
external nature characterising the Prysmian business model
in five categories: