BMW 2013 Annual Report Download - page 68

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18 COMBINED MANAGEMENT REPORT
18 General Information on the BMW Group
18 Business Model
20 Management System
23 Research and Development
24 Report on Economic Position
24 Overall Assessment by Management
24 General and Sector-specific
Environment
27
Financial and Non-financial
Performance Indicators
29 Review of Operations
47 Results of Operations, Financial
Position and Net Assets
62 Events after the End of the
Reporting Period
63 Report on Outlook, Risks and
Opportunities
63 Outlook
68 Risks Report
77 Report on Opportunities
81 Internal Control System and Risk
Management System Relevant for the
Consolidated Financial Reporting Process
82 Disclosures Relevant for Takeovers
and Explanatory Comments
85
BMW Stock and Capital Markets
Report on Outlook, Risks and Opportunities
Risks Report
Report on risks and opportunities
In the dynamic environment in which it operates, the
BMW Group is constantly confronted with new oppor-
tunities and risks. Making full use of the opportunities
that present themselves is the basis for its corporate
success. In order to achieve growth, profitability, effi-
ciency
and sustainable levels of business in the future,
the BMW Group consciously takes on certain risks. Good
management of opportunities and risks is a fundamen-
tal prerequisite for the ability to react appropriately to
changes in political, legal, technical or economic condi-
tions. Identified opportunities and risks are addressed
in the Outlook Report if they are likely to materialise.
The following sections focus on potential future develop-
ments
or events, which could result in a positive or
negative variance in the BMW Group’s outlook.
Posi-
tive variances are seen as opportunities, negative
variances
as risks. As a general rule, risks and opportu-
nities are assessed over a medium-term period of two
years. In specific cases, for the purposes of additional
transparency, the assessment is made separately for a
more short-term period of up to one year. All potential
risks of losses (individual and accumulated risks) are
monitored and managed from a risk management
perspective. As a matter of principle, risks that could
pose a going-concern threat are not entered into. Unless
stated otherwise, the disclosures made relate to the
Automotive segment.
Report on Risks
Risk management system
The objective of the risk management system and one of
the key functions of risk reporting is to identify, record
and actively manage internal and external risks which
pose a threat to the attainment of corporate targets.
The risk management system covers all risks which are
significant to the Group, or those which could pose a
threat to its going-concern status. With regard to the
structure of the risk management system, risk reporting
is the responsibility of each individual member of staff
and manager – in their various roles – and not with
that of any centralised
unit in particular. Each and every
member of staf
f and manager is required to report risks
via the available reporting channels. This requirement
is set out in guide lines that apply throughout the Group.
The Group risk management system comprises a de-
centralised
network covering all parts of the business,
which is steered by a centralised risk management func-
tion. Each of the BMW Group’s areas of responsibility
is represented within the risk management network by
so-called “Network Representatives”. The network’s
formal organisational structure helps to strengthen its
visibility and underline the importance attached to risk
management within the BMW Group. The duties, re-
sponsibilities, and tasks of the centralised risk manage-
ment unit and the Network Representatives are clearly
described, documented and acted on.
Risk management in the BMW Group
Analysis and
Measurement
ControllingMonitoring
Reporting
Identification
Risk management
Internal Control System
Group Audit
Compliance
Committee Risk Management
Steering Committee
Effectiveness
Usefulness
Completeness
Supervisory Board
Board of Management
Group-wide risk management