Enterprise-wide risk management

The negative development of asset values, currency fluctuations or changes in legislation – they are all risks that can influence a company's business. At PwC, we rise to the challenge of recognising such risks and minimising their negative consequences with the help of proven risk management systems.

Corporate risks arise from a variety of factors including complex markets, the increasing density of regulation and rising demands for transparency and effectiveness in organisations. Sorting out the situation can be overwhelming and questions from shareholders or supervisory committees about an organisation's risk situation are often an incentive for a comprehensive stocktaking of the current risk situation.

The following risks can endanger the successful implementation of corporate strategy:

• Regulatory risks: for example non-compliance with laws and industry or capital market regulations
• Latent risks: occurrences that are unlikely but could have serious negative consequences on business activity, such as a change in underlying political conditions
• Strategic and operational business crises: trends or occurrences with positive or negative effects on short- or long-term business, including market and process risks as well as negative developments in the real estate, tax, IT and financing sectors

Organisations are thus faced with the need to introduce a risk management system linked to their control processes so that they can manage regulatory, latent, strategic and operational business risks effectively.

The risk management system supports an organisation's management in:

• Gaining a structured and documented overview of the existing risk situation
• Making management of critical risks transparent
• Creating a recipient-oriented reporting procedure for the supervisory board and shareholders
• Including reliable statements on risk and risk management in the status report

PwC has developed a modular approach to risk management systems that makes it possible to monitor an entire organisation thus showing all relevant areas of risk. This proven procedure is aligned to requirements at the decision-making level and offers the following advantages:

• Build-up of an integrated risk management system by intelligently complementing the existing management instruments
• Build-up of a support system for timely, prioritised and comprehensible decision-making
• Audit-standard documentation on the initial and procedural organisation of risk management
• Guarantee of balanced alignment of opportunities and risks in the implementation of corporate strategy
• Drawing up of a catalogue of measures for identified weaknesses
• Transparency over cost/benefit aspects of risk strategies and possible countermeasures