WACKER continually surveys both the overall economic situation and industry-specific developments to identify risks as early as possible. WACKER has a riskmanagement manual that specifies risk management principles, processes and reportable levels of risks. The manual also describes how risks are to be covered and mapped. The WACKER Group Risk Management regulation governs, for example, reporting requirements and when a specific committee must be informed. WACKER revised this regulation in 2008. Specific individual risks facing the corporate units and business divisions are compiled in a risk list.
Identified risks are assessed according to their probability of occurrence and their potential affect on earnings. We employ various tools for the early detection and identification of risks. The Executive Board is informed of current and future business developments via monthly reports by the Corporate Controlling department. We evaluate and compare strategic opportunities and risks at regular meetings with our divisions. These meetings also serve as venues for communicating groupwide risks and discussing possible solutions.
WACKER’s Corporate Controlling ensures that our risk management standards are put into practice. It is responsible for the ongoing development of the risk management process, and the groupwide compiling of all substantial risks and their systematic evaluation according to uniform criteria. As the divisions are responsible for their own results, risk management is closely interwoven with the process of operational controlling. Operational risk management is thus anchored in these entities. To the same extent, Corporate Finance, Raw Materials Procurement, Technical Procurement & Logistics and Legal & Insurance are integrated in risk controlling at the Group level.
Corporate Finance is in charge of managing financial risks. All exchange-rate and interest-hedging transactions are concentrated in this area. Detailed stipulations and regulations, covering the functional separation of trading and settlement, among other things, mandate the scope of action. Receivables management vis-à-vis customers and suppliers is monitored by Corporate Accounting.