Page 22 - Demo

22 About Strategy and Governance Our People Our Business Our Outcome AppendixRisk ManagementFurthermore, the risk management process includes periodic risk dialogues between senior executive management and Group Risk, for discussion of risk developments (new or emerging risks and risk mitigation measures) as well as the monitoring of the global landscape for the identification of relevant exogenous risks.In the fourth quarter of the financial year, Group Risk collates all risk information obtained as part of the ERM cycle for attention of the Executive Committee, including recommendations for changes to the Group%u2019s previously determined risk map as well as risks to be prioritized for treatment. Ensuing deliberations and decisions are thereafter documented in an annual risk report, which depicts the Group%u2019s material strategic, financial, non-financial, operational, and event-driven risks, for consideration by the Board of Directors. The Board of Directors ultimately reviews and endorses the annual risk report if in agreement or else provides guidance for consideration of further risks or risk mitigation measures.In a sustainability context, risk identification and risk management address non-financial elements pertaining to potential adverse impacts of our business on stakeholders and the environment, determined through a materiality assessment. Managing climate change-related risks is an essential part of our enterprise risk management process, representing a specific set of risks with higher complexity given its longer-term perspectives in combination with the need to identify and assess climate change-related risks on the principle of double materiality. In other words, we examine both how our business activities may have adverse effects on climate change and how climate change may affect our business (risks and opportunities). Material topics and their actual or potential adverse impacts have shaped our Sustainability Policy and commitments. They also influence our sustainability objectives and strategies assigned for execution or risk mitigation according to ownership at the business, functional, and/or market level. A Sustainability Committee chaired by Group Sustainability coordinates all plans and actions with guidance from the Executive Committee and the Board of Directors. As a member of the Sustainability Committee, Group Risk also ensures that ERM and sustainability risks are aligned. The Sustainability Governance chapter contains more information about our sustainability governance structure. Further information about our risk management governance can be found in DKSH%u2019s Annual Report 2023 (pp. 23, 108, 117). %u2023 GRI 2-12At DKSH, we are dedicated to doing business in a responsible manner. This commitment is outlined in our Code of Conduct and further specified in our Responsible Procurement Policy, our Supplier Business Conduct Policy, and our Human Rights Policy as follows:%u2023 Optimizing the effectiveness of our distribution system by continuously improving our supply chain processes while reducing energy consumption, emissions, waste, and other environmental impacts%u2023 Procuring products and services in a responsible manner%u2023 Ensuring the health, safety, and development of our people%u2023 Ensuring the safety and integrity of the products we distribute through proper product stewardship %u2023 Observing the highest standards of ethics and integrity in our business conduct, including respect for human rightsRisk management is an integral part of our management processes as we strive to ensure that we live up to our commitments and meet our objectives. As a multinational company operating in many markets and industries, we face a variety of risks that may adversely affect our business. Our approach to managing risks combines a traditional Enterprise Risk Management (ERM) system having a strong focus on shareholder value with consideration of risks in a sustainability context, i.e. the identification of and response to potential adverse impacts from a stakeholder perspective in non-financial matters.Risk GovernanceRisk management is an unalienable duty assigned by Swiss law to our Board of Directors, as further specified in the organizational rules of DKSH Holding Ltd. The Board adopted a Risk Management Policy which installs risk management processes and procedures and related roles and responsibilities, specifying an annual cycle operated by a Group Risk Management function under supervision by the Executive Committee. As a general principle, endogenous risks are assessed and managed in a decentralized manner, by risk owners at the source where risks originate, directly in the business or in the various functional streams, such as Finance, Supply Chain, IT, Human Resources (HR), or Legal and Compliance. Group Risk is collecting corresponding risk information for consolidation and evaluation of materiality at enterprise level, including the identification of cluster, distributed, or interface risks. All reported risk information is logged in risk registers. Risks are identified and assessed at gross risk (before mitigation) and net risk level (after mitigation).