Sustainability report 2020 FINAL - Flipbook - Page 23
OUR RISK MANAGEMENT
Archroma is committed to a strong risk management throughout the company, supported by the Executive
Committee and Board of Directors. The risk management function is under the responsibility of the Head
of Risk Management & Internal Audit, reporting on risk management topics to the Chief Finance Officer in
his capacity as member of the Executive Committee.
The company has a Risk Management Policy in place since 2015 and has been undergoing regular risk
Since 2019, a new full risk mapping is performed and reviewed the Executive Committee twice per year.
These reviews include a rating of risks in terms of impact and likelihood as well as establishing action plans
and persons responsible for execution.
The results of every update to the risk mapping are shared with the Audit Committee of the Board of Directors.
Archroma initiated the risk management project with the primary objective to have an overview of the
main risks. Risk management is a very broad topic and therefore requires to be prioritized to identify
the areas that require attention.
The only risks specifically mentioned by the GRI criteria are focused on societal risk or climate change, but
we know from a commercial perspective there are many other risks, and Archroma has identified about
45 areas of potential risks, for example environmental risk, credit risk, raw material supply etc., that we
monitor and assess on a regular basis. In FY2020 Archroma also incorporated pandemics in its risk portfolio,
which has been considered as a ‘black swan’, and performed actions to limit its impact, as well as provide
sustainable solutions that contributed to overcome the crisis.
The data is gathered on a standalone platform, “TeamRisk”, a professional software which supports risk
Archroma is in the process of also integrating in this platform the risk owners of occupational risk, health
and safety, IT security, etc., so the management of risks will be consolidated, centralized, and monitored,
providing a comprehensive overview of risk management at all levels in terms of likelihood and impact.
This will allow to consolidate the results, and to set the action plan and the overall company audit plan
considering the risk elements.
In order to better support its risk management going forward, we also decided to implement a tool
allowing to map and rate risk in terms of likelihood and impact. This will allow to consolidate the results,
and to set the action plan and the overall company audit plan considering the risk elements.
The need for stronger focus on risk management was supported by the Audit Committee of the Board of
Directors of Archroma, as managing proactively Archroma’s risk portfolio is key to minimize their impact
and convert risks into opportunities. Our approach to risk management was well perceived by our external
stakeholders, such as our external auditors.
Internal audits are also used as a source of risk identification and mitigation, one that allows to avoid
unidentified risks which the team may have missed in periodical reviews.
The company is keen to raise awareness about risk management across the organization. The most
effective factors in doing so are the frequency of the risk assessment, as well as action planning and
execution. The effectiveness of the approach is demonstrated by the fact that our insurance and financial
partners are taking Archroma's risk-mitigating efforts in account when calculating our insurance premium