FORBO HOLDING AG ANNUAL

Risk Management

Risk management The ongoing and systematic evaluation of current and future risks invariably involves identifying and capitalizing on opportunities. Forbo regards risk management as a managerial and working tool designed, among other things, to safeguard the tangible and intangible assets of the Group. The Board of Directors ensures that it identifies risks and is able to determine and implement suitable measures to overcome them. It has a Group-wide risk assessment carried out annually. As regards b usiness risks, F orbo addresses strategic risks as well as market and financial risks. In the area of market risks, i nterest and currency risks are centrally monitored and hedged in certain cases. The liquidity and financing of subsidiaries are also monitored centrally. Forbo has a risk-based insurance coverage in line with industry practice and has appropriately insured in p articular operational risks such as property damage, business interruption, and liability. The risks specifically in the areas of property damage and business interruption are examined in the context of periodic risk engineering reports by external experts. For this purpose, production companies are visited at regular intervals, and comprehensive surveys are worked through with local management. Action plans are drawn up and implemented based on the risks identified. These risk engineering audits have been prepared since 1990. For further details on the assessment of market, liquidity and default risks, refer to the relevant explanations on pages 160 to 163 (note 23 ‘Financial risk management’) of the Financial Report section of the Annual Report. Compliance Under the guidance of the Corporate Compliance Officer, Forbo maintains a Compliance Management System developed in line with internationally recognized standards. The Corporate Compliance Officer is an independent role, reporting directly to the Chairman of the Board of Directors of the Forbo Group and forming part of the Compliance Committee along with the CEO of the Forbo Group and the Chairman of the Board of Directors. The role of Corporate Compliance is to secure and consolidate a culture of ethical conduct throughout the Forbo Group. The Corporate Compliance Officer coordinates various initiatives within the Compliance Management System, supporting the organization’s conformity with internal and external rules and regulations. T