Risks and uncertainties

  • Strategic risks
  • Cross business risks

The current macroeconomic situation, financial market volatility, complex management processes and continuous legislative and regulatory evolution force successful businesses to renew their ability to protect and maximise tangible and intangible sources of value that characterise their own business model. Assessing and preventing risks that might compromise the Group’s values and objectives have always been an integral part of Pirelli’s distinctive spirit of innovation and professional excellence.

For these reasons, the Board of Directors decided in 2009 to upgrade its corporate governance system by introducing a pro-active risk management system. It uses a systematic and organised process of identifying, analysing and assessing risk-prone areas that could compromise the attainment of strategic objectives, provides the Board of Directors and top management with decisionmaking tools so that they can anticipate and manage the effects of these risks and, more in general, govern them, guided by the awareness that the assumption of risk is a fundamental part of business management. Reference is made to the Corporate Governance Report for details on the new risk management system.

The principal types of risk to which the Group may be exposed are listed as follows:

  • Strategic risks, which are closely tied to the Group’s objectives and consequent strategic choices. This category includes the exogenous risks stemming from evolution in the external context where the Group operates and the risks stemming from internal factors, such as financial risks, the risks connected with typical business processes and human resource/organisation risks;
  • Cross business risks, which can always affect operating activities regardless of current strategies. This category includes business interruption risks, information system risks and financial disclosure risks (in regard to the latter, see the section “Risk Management System” in the Corporate Governance Report).