Reebok 2015 Annual Report Download - page 160

GROUP MANAGEMENT REPORT – FINANCIAL REVIEW
Risk and Opportunity Report
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RISK AND OPPORTUNITY
REPORT
The adidas Group consciously takes certain risks and continuously explores and develops opportunities
in order to remain competitive and ensure sustainable success. Our risk and opportunity management
principles and system provide the framework for our Group to conduct business in a well-controlled
environment.
RISK AND OPPORTUNITY MANAGEMENT PRINCIPLES
We define risk as the potential occurrence of an external or internal event (or series of events) that may
negatively impact our ability to achieve the Group’s business objectives or financial goals. Opportunity is
defined as the potential occurrence of an external or internal event (or series of events) that can positively
impact the Group’s ability to achieve its business objectives or financial goals. We have summarised risks
in four main categories: Strategic, Operational, Legal & Compliance and Financial. Opportunities are
classified in two main categories: Strategic & Operational and Financial.
RISK AND OPPORTUNITY MANAGEMENTSYSTEM
The adidas AG Executive Board has the overall responsibility to operate an effective risk and opportunity
management system that ensures comprehensive and consistent management of all material risks and
opportunities. The Group Risk Management department coordinates the execution and further development
of the adidas Group’s risk and opportunity management system and is the owner of the centrally managed
risk and opportunity management process on behalf of the adidas AG Executive Board. The adidas AG
Supervisory Board has the responsibility to monitor the effectiveness of the Group’s risk management
system. These duties are undertaken by the Supervisory Board’s Audit Committee. In addition, the Group
Internal Audit department includes an assessment of the effectiveness of risk management processes and
compliance with the Group Risk Management Policy as part of its regular auditing activities with selected
adidas Group subsidiaries or functions each year.
To facilitate effective risk and opportunity management, we implemented an integrated risk and opportunity
management system, which is based on the integrated frameworks for enterprise risk management and
internal controls developed and published by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). Additionally, it has been adapted to more appropriately reflect the structure as well as
company and management culture of the adidas Group. This system focuses on the identification, evaluation,
handling, monitoring and reporting of risks and opportunities. The key objective of the risk and opportunity
management system is to support business success and protect the company as a going concern through
an opportunity-focused but risk-aware decision-making framework. Our Group Risk Management Policy,
which is available on our intranet, outlines the principles, processes, tools, risk areas, key responsibilities,
reporting requirements and communication timelines within our Group.
Risk and opportunity management is a Group-wide activity which utilises critical day-to-day management
insight from both global and local business units and functions.
see Diagram 01