ANNUAL REPORT 2021
LUNDBECK
ANNUAL REPORT 2021
= CONTENTS
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RISK MANAGEMENT
Lundbeck's risk management processes
ensure close monitoring, systematic risk
assessment and the ability to identify,
manage and report internal and
external risks in a changing
environment.
RISK MANAGEMENT GOVERNANCE STRUCTURE
Lundbeck is exposed to risks throughout the value chain, from
the initial stages of developing innovative pharmaceuticals in
our in-house facilities to the proven pharmaceuticals reaching
the patients.
Lundbeck's risk management processes are continually updated
and adapted to match internal and external requirements, where
risks related to trends, global economic developments,
geopolitics and long-term forecasts are assessed as part of
Lundbeck's long-term strategic planning. With this
understanding of the wider context and an accurate and
complete overview of Lundbeck's activities and resources,
Executive Management has a clear basis for decision-making
on our overall risk-exposure and mitigating actions.
The overall responsibility of risk management lies with the
Board of Directors. Oversight of compliance within the
established enterprise risk management framework is delegated
to the Audit Committee.
RISK MANAGEMENT FRAMEWORK
In Lundbeck, enterprise risk management is considered an
integral part of doing business, which is reflected in the risk
management process.
The process starts in the decentralized teams within each
Executive Management areas, which have detailed and
extensive knowledge of the risks within their areas of
responsibility. They systematically identify, quantify, respond to
and monitor risks. They are ideally placed to mitigate our risk
exposure in the first instance.
Each area shares the risks with the central Risk Office on a
semi-annual basis. The central Risk Office provides the risk
framework and conducts interviews with management, risk
contributors and risk responsible individuals. This represents an
integral part in the alignment of risks reported to the Risk Office.
In cooperation with each Executive Management area, the Risk
Office assesses the likelihood of an event occurring and the
potential impact on the Group in terms of financial loss. The key
risk overview is presented to Executive Management for their
assessment and approval, before it is reported to the Audit
Committee and approved by the Board of Directors.
The corporate risk register kept by the Risk Office provides a
consolidated overview of Lundbeck's risk exposure by detailing
each risk, risk category and type. The risk descriptions provide
details on the event, its current status, the status of the
response and the likelihood and potential impact. Our reporting
process defines six risk categories:
.
Research and Development
• Market, Commercial, and Strategy
•
•
Supply, Quality and Product Safety
IT security
Legal and Compliance
• Financial
Lundbeck has developed a concise process covering day-to-day
risk identification, monitoring, mitigation and reporting within
each Executive Management area, all the way to the final
reporting to Executive Management. This process enables
Executive Management to control Lundbeck's risk appetite
when deciding strategy and practice, and when making day-to-
day decisions.View entire presentation