Centralised management and efficient organisation

Group-wide risk management tasks and responsibilities are clearly regulated and reflect METRO GROUP’s corporate structure. We combine centralised business management by the management holding company METRO AG with the decentralised operating responsibility of the individual sales lines. Overall responsibility for the effectiveness of risk management lies with the Management Board of METRO AG. The sales lines and Group companies are responsible for identifying, assessing and managing risks. Key elements of internal monitoring and control include effectiveness checks in the form of self-assessments by the management and review by the internal audits.

The Supervisory Board of METRO AG is responsible for overseeing the effectiveness of risk management. In compliance with the provisions of KonTraG (the German Corporate Sector Supervision and Transparency Act), the external auditor submits the Company’s early-detection system as part of the risk management system to a periodic review. The results of this review are presented to the Management Board and Super­visory Board.

METRO GROUP’s risk management officer determines the Company’s risk management approaches, methods and stand­ards. The risk management officer also coordinates the underlying process. In this context, he continuously and promptly informs the Management Board of METRO AG of important developments in risk management, ensures the Group-wide exchange of information and supports the continued development of risk management in all sales lines and Group units. The Group committee for risks and internal controls headed by the CFO of METRO AG regularly discusses risk management methods and the current risk situation. Aside from the risk management officer, permanent members of this committee include representatives of the Group’s Corporate Accounting, Corporate Controlling, Corporate Legal Affairs & Compliance, Corporate Internal Audit and Corporate Strategy departments as well as the CFOs of METRO Cash & Carry and Real.

Group reporting is the central vehicle for internal risk communication. It is complemented by risk management reporting. The aim is to allow for the structured and continuous monitoring of risks and document this in line with legal stipulations. In addition, Group reporting is also tasked with communicating possible risks to the relevant responsible persons.

We conduct an annual risk inventory to systematically map and assess all material Group-wide risks based on uniform criteria. The risk management officer sums up the results in a risk portfolio, which includes a description and assessment based on quantitative and qualitative indicators in terms of the extent of damage and the probability of occurrence. This summary enables a comprehensive assessment of the risks and opportunities of METRO GROUP and serves as the basis for the risk report compiled by the risk management officer. The results of the risk inventory and the risk portfolio are updated on a quarterly basis and summed up in a report. An emergency notification system takes effect in case of sudden serious risks to our asset, financial and earnings position. In this case, the Management Board of METRO AG directly and promptly receives the necessary information. The Management Board regularly informs the Supervisory Board or the Accounting and Audit Committee about risk management issues. Once a year, the Supervisory Board receives a comprehensive written report informing it about the organisation and alignment of risk management as well as the current risk situation.

Risk management as a closed loop

 

The risk management system is organised as a closed loop to ensure the design’s effectiveness with respect to the defined risk management rules. In addition, this allows us to guarantee an effective implementation and continuous improvement of the system based on results and experiences.