Chrysler 2015 Annual Report Download - page 101

2015 | ANNUAL REPORT 101
RISK MANAGEMENT
Our Approach
Risk management is an important business driver and is integral to the achievement of the Group’s long-term business
plan. We take an integrated approach to risk management, where risk and opportunity assessment are at the core of
the leadership team agenda. Our success as an organization depends on our ability to identify and capitalize on the
opportunities generated by our business and the markets in which we compete. By managing the associated risks,
we achieve the proper balance between growth and return goals and related risks, allowing us to strive to secure
performance and profitability targets as well as enhance stakeholder value.
Risk Management Framework
The Group’s internal control system (the “System”) is based on the COSO Framework (Committee of Sponsoring
Organizations of the Treadway Commission Report - Enterprise Risk Management model) and the principles of
the Dutch Corporate Governance Code. The System consists of a set of policies, procedures and organizational
structures aimed at identifying, measuring, managing and monitoring the principal risks to which the Company is
exposed. The System is integrated within the Company’s organization and corporate governance, supports the
protection of corporate assets, the efficiency and effectiveness of business processes, the reliability of financial
information and compliance with laws and regulations.
The System consists of the following three levels of control:
Level 1: operating areas, which identify and assess risks as well as establish specific actions for management of risks;
Level 2: specific departments responsible for risk control, which define methodologies and tools for both monitoring
and managing the Company’s risks;
Level 3: enterprise risk management functions, which facilitate the monitoring of our risks and manage discussions of
our risks with the Group’s Executive Council (the “GEC”);
In addition to the three levels of control, the results of the COSO process are part of the risk assessment of the
Group Internal Audit in defining its audit plan and accordingly, specific audits are planned for global enterprise risk
management (“ERM”) significant risks.
The GEC, which is supported by senior management, is responsible for identifying, prioritizing and mitigating risks and
for the establishment and maintenance of a risk management system across our operating segments. As the decision-
making body led by the CEO and composed of the heads of the operating segments and certain central functions,
the GEC reviews the risk management framework and the Company’s key global risks on a regular basis. For those
risks deemed to be significant, comprehensive mitigating action plans are developed and reviewed on a regular basis
to ensure the action plans are relevant and sufficient. At least annually, our risk management framework and risks are
discussed with the Group’s Audit Committee.