2013 SuStainability RepoRt >
eConomiC and finanCial ReSponSibility
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| pRySmian gRoup | 2013 SuStainability RepoRt
PRYSMIAN’S RISK MODEL
Having regard for the risk model adopted, the process involves
a top-down approach whereby the Chief Risk Officer, together
with the Board of Directors and Senior Management, identifies
the risk areas that are most significant when it comes to
achieving the strategic objectives. These areas are then
analysed further to identify the specific situations and risk
events to be measured and assessed in subsequent phases of
the process. The top-down approach ensures that an overall
assessment is made of the Group’s entire risk portfolio. If
any significant risks are identified, suitable measures can be
taken to reduce the chance of underestimating them or their
interaction with other types of risk.
Each situation or specific risk event identified is analysed,
considering the impact of the risk, the probability of
occurrence and the adequacy of the risk management process
should the situation actually arise.
RISK ASSESSMENT CRITERIA
Strategic
financial
operational
legal & Compliance
planning & Reporting
Changes in
macroeconomic and
competitive environment
and in demand
Stakeholders expectations
Key customers and
business partners
Emerging market risk
M&A/JVs and related
integration processes
Investments
Strategy implementation
Organisational structure
& governance
Commodity price
fluctuation
Exchange rate fluctuation
Interest rate fluctuation
Financial instruments
Credit risk
Liquidity/working capital
Availability/cost
of capital
Financial counterparties
Sales and calls for tender
Production capacity/
efficiency
Supply chain capacity/
efficiency
Business interruption/
catastrophic events
Contract performance/
liability
Product quality/liability
Environment
Information systems
Human resources
Outsourcing
Intellectual property
rights
Compliance with laws
and regulations
Compliance with Code
of Ethics, policy
e procedures
Budget & strategic
planning
Tax & financial planning
Management reporting
Financial reporting
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assessment Criteria
likelihood
impaCt
• Impact
• Likelihood
• Level of Risk Management
Remote
Negligible
Low
Moderate
Medium
High
High
Critical
level of Risk management
Risk INADEQUATELY covered and/or managed
Risk covered and/or managed but with ROOM
FOR IMPROVEMENT
Risk ADEQUATELY covered and/or managed
