Getinge 2022 Annual Report slide image

Getinge 2022 Annual Report

Getinge 2022 Annual Report Introduction Strategy Corporate Governance Annual Report Sustainability Report Other information Contents Assurance framework, risks and risk management Risk management framework Getinge actively and systematically manages the risks that the Group is exposed to through its operations. Getinge has a framework for managing risks that could affect the fulfillment of the Group's targets and strategies. This frame- work entails, for example, that the Getinge Executive Team conducts an annual evaluation of material risks and their effect on Getinge's operations, and decides on measures to reduce risks and their potential effects. This work is continuously monitored by the Getinge Executive Team during the year. The Getinge Executive Team's risk evaluation is reported to the Board of Directors and serves as a key starting point in determining the areas that Corporate Internal Audit is to examine. The three Business Areas are fully responsible for their results. In addition, the three Business Areas and the Global Sales and Service organization are owners of risk in their respective areas. Accordingly, they have their own risk-management structures in their respective operations. Corporate functions assist the Business Areas and the Global Sales and Service organization in managing risks in a number of areas by providing governance. The group support functions are responsible for supporting and coordinating the development of the organization and driving synergies in their respective areas. A number of established forums that focus on risks of a particular nature conduct regular evaluation and monitoring to ensure correct coordination and management from a Group perspective. To continuously identify, manage and follow up on risks, several forums have been established such as Ethics Committee, Sustainability Board and the forum for the Group's risk managers, as well as a Chief Information Security Officer (CISO) to manage cyber risk and the Getinge Centre of Excellence to address cybersecurity related to the Group's products. This is in addition to quarterly risk follow-up with Business Areas and the Global Sales and Service organization. Risk assessment By conducting quantitative and qualitative risk analyses based on the offering and operations, Getinge identifies the key risks that could prevent the achievement of business and financial targets. In addition, several units in each Business Area and in the Global Sales and Service organization are analyzed to gain a more detailed understanding of the actual compliance of existing rules and regulations. Measures to manage identified risks are thereafter formulated. The overall responsibility for identifying and addressing potential risk areas lies with the Getinge Executive Team and the business operations. The Ethics & Compliance and Corporate Internal Audit functions assist with support and ongoing monitor- ing as well as investigations and internal audit, which help to identify risk. In 2022, Getinge has continued its efforts to strengthen risk identification, preventive measures and management through Corporate Internal Audit and the Corporate Risk Management function. Management of the Group's risks is based on Getinge's decentralized structure, since knowledge about risks in the Group is present in operations. The Getinge Executive Team has identified six priority risk areas resulting from the group-wide analysis performed in 2022, which are presented in the table on the following pages. In addition to these priority risks, regular measures are taken to manage other risks according to needs and resource availability. Each of the primary risk areas is owned by a specific member of the Getinge Executive Team and work is being conducted to identify specific risks in each area and develop plans to prevent risks, mitigate the potential effects and deliver on these plans. It is important to note that the risks presented on the following pages are not an exhaustive description of the Group's risk exposure. However, these are the risks that have been deemed to be most relevant for the Group to actively manage. Getinge's insurance program Strategy The Group works actively with loss prevention activities, for example, through its extensive quality activities and by preventing interruption risks in the operations. Getinge is to act as if the Group were uninsured. That means that Getinge continuously considers risk factors and manage them as part of the daily work. Actively monitoring incidents and correcting underlying causes means that claims related to product liability can be prevented. The insurance program exists to protect the consolidated balance sheet and to avoid fluctuations in the income statement. Group-wide insurance program Getinge has a group-wide insurance program that encompasses the global operations. The aim is to cover insurable risks with adequate limits based on current risk exposure levels. Insurance policies have been entered into with insurance companies with high credit ratings and a documented ability to provide claims assistance. A joint insurance program creates economies of scale and ensures a harmonized approach to limits and deductibles. It also creates a platform for building a balanced and cost-efficient program to prevent fluctuations in earnings. Customer value Stable and standardized insurance coverage for the Group's global operations also adds customer value since it is required in many tender and procurement processes and when commercial contracts are signed. Ethics & Compliance The above risk signaling system is supplemented by the Ethics & Compliance function. Within the scope of its assignment, the Audit and Risk Committee monitors the work of the Ethics & Compliance function. Read more about the Group's work on Ethics & Compliance and responsible leadership in the Ethics & Compliance report that is available on the company's website. In 2022, work has progressed on building up the Ethics & Compliance function to ensure that it can independently work with business ethics and compliance. 50 50
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