Risk management in 2017

Enterprise risk management is a company-wide activity, under the responsibility of the Board of Management and the Executive Committee, which ensures we focus on the areas of major risk exposure.

During 2017, we held 84 enterprise risk management workshops. They identified around 1,700 unique risk scenarios, which were prioritized by responsible manage-ment teams and functional experts. The outcomes of all risk analyses are included in risk profiling and trend analysis and shared by managers across the company at different levels.

Our initial focus is on major risks that may impact achievement of our strategy in the next three-to-five years (medium-term risks). We also recognize there are relevant risk factors beyond the five-year horizon that could impact our strategy (long-term risks). Both risk categories feature in this chapter on the understanding they are not exhaustive lists. There may be current risks the company has not fully assessed, or that are currently identified as not having a significant impact, which could, at a later stage, develop into a material impact.

As well as risks listed in this section, our 2017 risk landscape changed due to the decision to separate Specialty Chemicals, and the actions of an activist shareholder.

The separation of Specialty Chemicals is not without risk. We have, however, assessed a complete set of risks and mitigating measures which we believe adequately address:

  • All aspects – legal, operational, human and economic – of the path to separation
  • The options to divest or demerge
  • The challenges that lie beyond the separation for the Specialty Chemicals, and Paints and Coatings businesses

During 2017, we intensified our discussions with shareholders. We will continue to develop this, and our communication with other stakeholders.