Risk Report
- Group-wide early warning system used to manage risk
- Risk management a systematically applied strategic success factor
- Group’s financial base bolstered further
- No risks relating to the company’s ability to continue as a going concern
Group risk management
Risk management at HOCHTIEF takes in all organizational
processes involved in identifying risks as well as
in developing and initiating suitable action to counter
them. A risk is defined as any contingency with a
potential negative impact on the attainment of qualitative or
quantitative business goals, and in particular on earnings and liquidity.
Risk management is a key success factor for HOCHTIEF
and as such forms an integral component of our management
system. Employees’ awareness of risk is systematically
raised to an optimum by means of continuously
fine-tuned organizational processes at all levels, IT systems and
open communication across the Group.
HOCHTIEF Group early warning system
A Group-wide directive available to every employee
lays down standard procedures for risk management.
To supplement this Group directive, the divisions have
produced their own organizational instructions developed
with their specific circumstances in mind. The
stronger focus placed on liquidity risk in 2009 when
the financial crisis began has proven worthwhile and
is being retained.
In addition, the Group audit function checks and assesses
compliance with the requirements and the
effectiveness of the installed systems and processes.
Its findings are used to optimize the early detection and
management of risk.
Risk inventories and forecasts are compiled at all
operating locations three times a year and the resulting
information is aggregated to Group level. This approach
brings in managers at all levels of the corporate hierarchy.
The risk report contains information on the potential
impact of a risk, its probability of occurrence, risk
category, possible time-scale and any measures that
have already been taken to avert it. Above and beyond
this quantitative risk assessment, HOCHTIEF considers
it particularly important that the risks are discussed
openly by management. To this end, it has put in place
a Risk Management Steering Committee composed of
representatives from all divisions and corporate departments.
This forum looks at reported risks from the perspective
of both the divisions and the holding company.
In doing so, it coordinates and adopts specific
countermeasures. Corporate Controlling prepares the Steering
Committee’s findings for submission to the Executive
Board, which then discusses and adopts the risk report.
The risk position is discussed at scheduled intervals at
the meetings of the Supervisory Board’s Audit Committee.
Within HOCHTIEF’s risk early warning system,
the Investment Committee plays a key role in risk avoidance.
This committee ensures that all investments and capital
spending are assessed in accordance with recognized,
uniform principles and only approved if they meet strict
criteria.
In addition to the risks, the planning and forecast reports
submitted to the Executive Board also outline the
opportunities HOCHTIEF faces. There is no offsetting of risks
and opportunities.
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