Mercedes 2008 Annual Report Download - page 79

Management Report |Overall Assessment of the Economic Situation |Events after the End of the 2008 Financial Year |Risk Report |75
Further events after the end of the 2008 financial year.
Since the end of the 2008 financial year, there have been no furt-
her occurrences that are of major significance for Daimler. The
course of business in the first two months of 2009 confirms the
statements made in the “Outlook” section of this Annual Report.
Events after the End of
the 2008 Financial Year
Risk management system
Within the framework of their global operations and as a result of
increasingly intense competition, Daimler’s divisions are exposed
to a large number of risks which are inextricably linked with their
entrepreneurial activities. These entrepreneurial activities consist
not least of identifying and utilizing opportunities to secure and
enhance the Group’s competitiveness. Effective management and
monitoring systems are combined into a uniform risk mana-
gement system, meeting the requirements of applicable law and
subject to continuous improvement, which is employed for the
early detection, evaluation and management of risks.
The risk management system is integrated into the Group’s
value-based management and planning system. It is an integral
part of the overall planning, monitoring and reporting process
in all relevant legal entities and central functions, and aims to syste-
matically identify, assess, monitor and document risks. Risk
assessment principally takes place for a two-year planning period.
With the use of defined risk categories, risks are identified for
the divisions and operating units, the major associated companies
and the central departments, and are assessed regarding their
probability of occurrence and possible extent of damage. Assess-
ment of the possible extent of damage usually takes place in
terms of the risks’ impact on EBIT. The communication and repor-
ting of relevant risks are controlled by value limits set by mana-
gement. The responsible persons also have the task of developing,
and initiating as required, measures to avoid, reduce and hedge
risks. Major risks and the countermeasures taken are monitored
within the framework of a regular controlling process. As well as
the regular reporting, there is also an internal reporting obligation
within the Group for risks arising unexpectedly. The Group’s
central risk management department regularly reports on the iden-
tified risks to the Board of Management and the Supervisory
Board. The risk management system enables the Board of Mana-
gement to identify key risks at an early stage and to initiate
suitable countermeasures. By carrying out targeted audits, the
Corporate Audit department monitors compliance with the
statutory framework and with the Group’s internal guidelines as
defined in the Risk Management Manual, and, if required, initia-
tes appropriate action. In addition, the external auditors examine
the system for the early detection of risks that is integrated into
the risk management system in terms of its fundamental suitability
for the early recognition of developments that could jeopardize
the continued existence of the Group.
Risk Report