Prysmian Group – 2015 Sustainability Report
Group ID Card
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Risk Management
The Prysmian Group adopts a system of internal control and risk management based on tools and
information flows that enable the Board of Directors to take strategic decisions and establish
guidelines for the system in an informed manner, considering the context in which the Group
operates and the related financial, environmental and social risks.
The value creation policy pursued by the Prysmian Group is and always has been based on the effective
management of risks. Commencing from 2012, on adoption of the recommendations of the “Corporate
Governance Code for companies listed on the Italian Stock Exchange" regarding the management of risks,
Prysmian has taken the opportunity to strengthen the Group's governance model and implement an
advanced risk management system. This promotes the pro-active management of risks using a structured
and systematic tool that supports the maindecision-making processes. This Enterprise Risk Management
(ERM) model, developed in line with internationally recognised models and best practices, allows the Board
of Directors and management to evaluate in an informed manner those risk scenarios that might compromise
the achievement of strategic objectives, and to adopt tools that are able to foresee, mitigate or manage
significant exposures.
The Group's Chief Risk Officer (CRO), appointed to govern the ERM process, is responsible for
guaranteeing together with management that the main risks faced by Prysmian and its subsidiaries are
identified, assessed and monitored on a timely basis. In addition, an Internal Risk Management Committee
comprising senior managers ensures, via the CRO, that the ERM process remains dynamic to reflect
changes in the business, requirements and events affecting the Group over time. The CRO reports
periodically (at least twice each year) to senior management on these changes.
The ERM model adopted, formalised in the Group ERM Policy that incorporates the guidelines for the
System of Internal Control and Risk Management approved, in turn, by the Board of Directors back in 2014,
follows a top-down approach, i.e. based on direction from senior management and the medium/long-term
strategies and objectives of the business. This extends to all types of risk/opportunity that are potentially
significant for the Group. These are shown in the risk model - presented below - which groups the areas of
internal and external risk into five families that characterise Prysmian's business model:
Strategic Risks: risks deriving from internal and external factors, such as changes in market conditions,
business decisions that are wrong and/or implemented improperly, and slow reactions to changes in the
competitive environment that might threaten the Group's competitive position and the achievement of its
strategic objectives;
Financial Risks: risks associated with the availability or sources of finance, or the ability to manage
efficiently the volatility of exchange and interest rates;
Operational Risks: risks deriving from events or situations that limit the effectiveness and efficiency of
key processes, affecting the ability of the Group to create value;
Legal and Compliance Risks: risks connected with violations of national, international and sector
regulations or professionally improper behaviour that does not comply with the Code of Ethics, which
expose the Group to possible penalties and damage its reputation in the marketplace;