A company’s ability to manage corporate risks effectively serves to maintain its value in the interest of long-term sustainability. It is for this reason that Brembo has defined a precise Internal Control and Risk Management System (ICRMS), which forms an integral part of the Group’s Corporate Governance system. This system has been defined in accordance with best national and international practices and includes specific rules, procedures and organisational responsibilities for identifying and managing corporate risks correctly.
The Internal Control and Risk Management System reflects Brembo’s Code of Ethics as it was set up to share ethical business principles and values, and seeks to establish over time a fully-fledged culture of corporate controls aimed at ensuring legality, correctness and transparency in all company operations, involving the whole organisation in developing and applying methods to identify, measure, manage and monitor risks.
With reference to risk management, Brembo has defined the following Guidelines and procedures:
• A Risk Management Policy based on ISO standard 31000, approved by the Board of Directors, which establishes the Group’s general direction and policies relating to risks, risk management and harmonisation of processes
• A Risk Management Procedure, designed to provide Guidelines in terms of methodology and operating guidance to support the risk management process
• A risk management process founded on a Risk Model consisting of the following risk families:
- external risks
- strategic risks
- operating risks
- financial risks
Risk management is an integral part of decision-making and business management processes, including strategic and operational planning, the management of new business initiatives and the associated change, as well as the preparation of specific reports for stakeholders.
During 2020, Brembo continued along its development path designed to reinforce its Sustainability Model and comply with the non-financial statutory disclosure requirements, introduced with Legislative Decree No. 254/2016. Brembo has updated the risk assessment in the Sustainability area, using the assessment criteria aligned with the Group’s risk management methodology. Set out below are the main risks identified by Brembo, as well as the mitigation measures put in place to date and the future objectives for managing them:
- Environmental risks
- Risks relating to supply chain management and protection of human rights
- Risks relating to human resources
- Risks connected to corruption and regulatory compliance
- Social risks
Effective risk and crisis management is crucial to ensuring long-term business soundness and continuity. As a result of the financial crisis first, and the pandemic emergency now, risk management has become especially important, making it clear that companies must implement internal control processes capable of ensuring organisational flexibility and of responding to change.