Reebok 2015 Annual Report Download - page 163

GROUP MANAGEMENT REPORT – FINANCIAL REVIEW
Risk and Opportunity Report
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In assessing the potential effect from opportunities, each opportunity is appraised with respect to viability,
commerciality and potential risks. This approach is applied to longer-term strategic prospects but also to
shorter-term tactical and opportunistic initiatives at the Group level as well as at the market and brand
level. In contrast to the risk evaluation, only the net perspective exists for assessing opportunities.
•Risk and opportunity handling: Risks and opportunities are treated in accordance with the Group’s
risk and opportunity management principles as described in the Group Risk Management Policy. Risk
Owners are in charge of developing and implementing appropriate risk-mitigating action and exploiting
opportunities within their area of responsibility. In addition, the Risk Owners need to determine a general
risk-handling strategy for the identified risks, which is either risk avoidance, risk reduction with the objective
to minimise impact and/or likelihood, risk transfer to a third party or risk acceptance. The decision on the
implementation of the respective risk-handling strategy also takes into account the costs in relation to
the effectiveness of any planned mitigating action if applicable. The Group Risk Management department
works closely with the Risk Owners to monitor the continuous progress of planned mitigating action and
assess the viability of already implemented mitigating action.
•Risk and opportunity monitoring and reporting: Our integrated risk and opportunity management
system aims to increase the transparency of Group risks and opportunities. As both risks and opportunities
are subject to constant change, Risk Owners not only monitor developments but also the adequacy and
effectiveness of the current risk handling strategy on an ongoing basis.
Regular risk reporting consists of a two-step reporting stream supported and facilitated by a globally used
Group-wide IT solution. Firstly, on a quarterly basis, Risk Owners are required to report to Group Risk
Management risks with a possible gross impact rating of at least moderate or a net impact rating of at
least minor, both regardless of the likelihood of materialising. Risk Owners are also required to report all
opportunities with an impact rating of at least minor. Secondly, Group Risk Management aggregates the
reported risks and opportunities and, also on a quarterly basis, provides a consolidated Group-wide report
based on the Risk Owners’ input, which specifically highlights substantial individual risks and opportunities
as well as, on an aggregated level, key areas of risk and opportunity.
Material changes in previously reported risks and/or newly identified risks with a potential net impact of at
least moderate, and any issues identified which due to their material nature require immediate reporting to
the Executive Board, are also reported outside the regular quarterly reporting stream on an ad hoc basis.
COMPLIANCE MANAGEMENTSYSTEM
ADIDAS GROUP FAIR PLAYCOMPLIANCE FRAMEWORK
At the adidas Group, we consider compliance with the law as well as with external and internal regulations
to be imperative. Every employee is required to act ethically and in compliance with the law as well as with
external and internal regulations while executing the Group’s business. Violations must be avoided under
all circumstances. As a company with worldwide operations and more than 55,000 employees, however,
the Group accepts that it will never be possible to exclude compliance violations with absolute certainty.
The adidas Group Fair Play Compliance Framework and our risk and opportunity management system
are closely aligned and both are overseen by the Group’s Chief Compliance Officer who reports directly
to the Group’s Chief Executive Officer. We see compliance as all-encompassing, spanning all business
functions throughout the entire value chain, from supply chain through to the end consumer. As a result,
the identification, analysis and evaluation of potential compliance risks are essential for our risk and
opportunity management process. The Group Risk Management department works closely with the Risk
Owners and responsible Compliance Officers to conduct a systematic assessment of key compliance risks
on a quarterly basis. In addition, the Group Compliance department regularly conducts detailed compliance
risk assessments within selected Group entities.