Investor Presentaiton
33
A.P. Moller-Maersk Annual Report 2020
Directors' Report
Our business
Risk management
=
identify, assess and respond to key risks that can
threaten A.P. Moller - Maersk's ability to achieve
its business objectives. The process is integrated
into strategy review, business planning and per-
formance management.
Each year, risks are identified and assessed follow-
ing a comprehensive process covering the enter-
prise and the individual brands. The enterprise
risks identified are validated for relevance and sig-
nificance by senior business leaders. Finally, the
Executive Leadership Team reviews the risks and
decides the key risks to the strategy and the busi-
ness plan.
The Executive Leadership Team appoints a risk
owner for each key risk to oversee the manage-
ment of the risk, including the preparation and
execution of mitigation action plans. Once the
plans for the management of the risks are final-
ised, the progress and effect of such plans are
monitored by the Executive Leadership Team and
the Audit Committee in designated and regular
sessions. Where the progress of mitigating actions
is falling behind schedule, or where mitigating
actions are not achieving the effect they were
designed to have, corrective actions are taken.
The ERM process for 2021 was carried out in the
second half of 2020. It identified ten key risks that
may have a significant impact on the business
plan, including on earnings, financial position and
achievement of other strategic objectives.
2021 Key risk analysis
The key risks to achieving the A.P. Moller - Maersk 2021-2025 business plan,
the assessment of each risk, and the mitigation strategies deployed are described
in the following.
High
Likelihood
25%
Low
December 2020 position
ā December 2020 - new risk
Risk description
1
Customer service level
2
Technology roadmap
3
2
Cyber-attack
4
Ocean industry collapse
6
5
People safety and security
6
Mergers & Acquisitions
7
Decarbonisation
8
9
10
9
5
8
7
Financial or reputational impact
All positions are residual risk after current mitigation.
Organisational capabilities
Compliance
10 Company culture and
engagement
High
During 2020, A.P. Moller-Maersk has worked sys-
tematically on mitigating key risks shown in the
Annual Report 2019 to further reduce residual
risk levels. Among other things, the risk reduc-
tions achieved in 2020 imply that risks relating to
IMO 2020 low sulphur fuel, cost excellence in Ocean,
and the APM Terminals transformation are not per-
ceived to be among key risks into 2021. Also, the
risk relating to standardisation of core processes is
now included in the technology roadmap risk. Resid-
ual risk levels of continuing risks and new risks by
December 2020 are depicted on the heatmap above.View entire presentation