Audi 2012 Annual Report Download - page 187

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RISKS, OPPORTUNITIES AND OUTLOOK
RISK REPORT
The risk management system within the Audi Group
Risk management approach
The Audi Group is also forced to confront risks through its entrepreneurial activity as a globally
active automotive manufacturer. As a result, for many years the Audi Group has maintained a
Group-wide risk management system based on the internationally recognized standard of the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). The risk manage-
ment system is continually expanded and refined. In view of its high strategic relevance, the risk
management system’s organizational structure is laid down in an internal Board Directive. The
objective of the risk management system is to identify the risks associated with the Company’s
business activities as early as possible and to minimize or, where possible, to exclude them alto-
gether. Entrepreneurial risks are deliberately taken only where they are controllable and commen-
surate with the anticipated benefit from that operational activity.
Central Risk Management operates in partnership with the risk managers in the divisions and sub-
sidiaries in order to be prepared for the increasingly volatile and heterogeneous developments on
global automotive markets, and so that the Company can respond quickly and efficiently. Central
Risk Management performs a coordinating and supporting role here. The operational tasks of risk
management are integrated into the processes of the individual corporate divisions and subsidi-
aries. The standards and regulations defined by Central Risk Management apply Group-wide and
ensure that risks are identified and assessed uniformly. Central Risk Management monitors the
effectiveness of the risk management instruments implemented non-centrally (internal control-
ling system) with the aim of steadily improving them.
Within the scope of an indicator-based risk early warning system, risk management analyzes short
and long-term developments in the Company’s environment. Taking this as the basis, preventive
measures are then identified and implemented by the risk managers in the areas concerned.
This broad-based policy promotes risk transparency and risk awareness within the Audi Group.
A regular, structured exchange of information between Central Risk Management and the non-
central risk managers enhances the effectiveness of the risk early warning system. At the same
time, this continuing dialogue promotes an open risk culture.
Greater transparency makes it easier to manage risks effectively and promotes the stability of
the business model in the Audi Group.
To support the strategic decision-making process, a combined report on risk management and
compliance is submitted regularly to the Board of Management and the Audit Committee of the
Supervisory Board. The risks identified in the Audi Group and the countermeasures adopted for
them are taken into account in corporate planning and management.