Risk management system

The Wilo Group has a state-of-the-art, integrated, globally available risk management system. It ensures that business risks are identified at an early stage and effective countermeasures are initiated promptly. The monitoring of the measures initiated and their consistent implementation is a key component of the system. This is based on the following central principle – once identified, risks are assessed, managed as far as possible, and monitored at all times. The risk management system is audited annually by Internal Audit on the basis of Audit Standard No. 2 promulgated by Deutsches Institut für Interne Revision (IIR).

Risk management at the Wilo Group is organised on a decentralised basis. Level-two managers throughout the Group are responsible for risk tracking and reporting. They act as risk management officers, work closely with the Group risk manager and are aided by Controlling. Throughout the entire company, uniform risk assessment and procedural compatibility are guaranteed through the use of checklists and risk classification. The relevant communication and information platform is provided by software in line with Group requirements.

The Executive Board bears overall responsibility for risk management and defines the risk strategy for the Wilo Group. Risk strategy is implemented throughout the Group using uniform guidelines and processes.

Integral components of the risk management system are:

  • the Risk Management Directive
  • the risk atlas
  • the Group risk manager
  • risk management officers in the regions, product divisions and central functions
  • regular risk reporting
  • ad hoc risk reporting

The Risk Management Directive of the Wilo Group sets out the principles for handling risks. In addition, it stipulates the requirements of risk reporting, procedures for the measurement of risk and compulsory reporting thresholds. The Directive also defines the duties and authorisations of persons involved in the risk management process.

The risk atlas sets out uniform categories to be used for the structuring of risk identification. To ensure that all relevant risk areas are always tracked, the risk atlas is checked for completeness on an ongoing basis and adjusted as required.

The Group risk manager coordinates the risk management process and, in this function, reports regularly to the WILO SE Executive Board on a quarterly basis and on an ad hoc basis as necessary. The respective risk management officers of the Wilo Group ensure that risks are tracked and controlled in the divisions for which they are responsible. In this way, specific risks are identified and reported on for the individual sales regions, product divisions and central functions. 

As part of risk identification, information on customers and suppliers is analysed and market and competition analyses are prepared. Furthermore, risks emerging from the political and overall economic environment are monitored and assessed.

The risks identified are analysed using a uniform methodology set out by the Risk Management Directive. The probability of occurrence (in the next twelve months), gross and net risk are calculated for each identified risk. The net risk takes into account measures to prevent or mitigate risk. The aim of these measures is to reduce the potential loss or the probability of occurrence. Where possible and economically feasible, risks are limited by insurance policies or, for financial risks, by the use of suitable derivative financial instruments. The Risk Management Directive defines reporting thresholds. It stipulates that the risk management officers must report every risk for which the net potential loss exceeds a defined value regardless of the probability of occurrence.

The risks reported by the divisions are also aggregated at Group level in the risk management system. The Executive Board receives quarterly and, if necessary in individual cases, immediate reports on the findings of risk analyses. In addition, the Supervisory Board and the Audit Committee it appoints are comprehensively and constantly informed of the status and development of the risk management system.

The basic aim of this controlling system is to keep the Wilo Group’s overall risk exposure transparent and within acceptable limits.

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WILO SE
Corporate Communications
Nortkirchenstraße 100
44263 Dortmund
T +49 231 4102-0
F +49 231 4102-7363

Contact

WILO SE
Corporate Communications
Nortkirchenstraße 100
44263 Dortmund
T +49 231 4102-0
F +49 231 4102-7363