Risk Management

Kendrion promotes local entrepreneurship at its companies and, logically, offers scope to exercise the associated discretionary powers. Kendrion actively conveys the essential need to maintain a healthy equilibrium between the entrepreneurial spirit and the extent to which risks are accepted. Adequate risk management is an integral element of good business practice. When risks are made visible Kendrion’s managers can implement adequate measures in their everyday management that offer them optimum control of the risks. Kendrion’s risk management is not intended to eliminate all risks entirely. Kendrion’s objective is to adopt the carefully-considered approach to business risks required to minimise surprises.

Kendrion has a responsibility to put internal control and procedures into place and tests to verify their adequate performance. The local management is expected to be fully aware of the operating risks and the necessity for internal control procedures. Kendrion has devoted structural attention to the optimisation of the risk management and control system since 2005 as part of the day-to-day decision makings.

All companies are logically confronted with business risks during the pursuit of their operations. Kendrion’s policy is focused on mitigating the risks or, when possible and sensible, hedging the risks without losing sight of the company’s entrepreneurship.

The Board wishes to emphasise that risk management and control systems – no matter how professional they may be – can neither offer absolute guarantees that the company’s objectives shall be achieved nor entirely prevent material errors, loss, fraud, or violations of laws or regulations.

Kendrion’s organisation of risk management varies for each focal point and can, if necessary or so required, rapidly be tightened. A structured approach to financial reporting risks and the organisation of workshops to map strategic and operating risks are both standard practices of risk management. The specific attention directed to the consequences of the financial crisis in the second half of 2008 is one example of the necessary tightening of risk management.
 

Fore information on the sensitivity of Kendrion’s financial results to some of these risks, please see the individual risks discussed in this section.