Risk management
Laying foundations for sustained business success
HOCHTIEF's global business naturally involves risks. But risks can only cause real harm if they remain undetected and hence uncontrolled and uncontained. Our sophisticated risk management system employs proactive risk control to minimize potential impacts - and is key to advancing the Group's successful development and profitability.
Integrated risk management
Risk management at HOCHTIEF takes in all organizational processes geared to early risk detection and the identification and timely implementation of appropriate countermeasures. A risk is defined as any contingency with a potential negative impact on the attainment of business goals – and particularly on earnings trends.Acknowledged as a key success factor at HOCHTIEF, risk management is integral to our entire management system. Risk management relies on the acuity and experience of our workforce. Recognizing this, we have introduced a continuously evolving risk culture sustained at all levels by organizational processes, systems and communication.
You can find the current risk report at reports.hochtief.com.
Key features of the risk management process
HOCHTIEF deploys and continuously fine-tunes integrated planning, control and monitoring systems to ensure early risk detection, appraisal and management.
Planning as part of risk management
In planning, ideas for the strategic direction of our enterprise are developed and evaluated by analyzing our business environment and evaluated by analyzing our business environment and market position. Once a strategy has been adopted, binding targets are set for operational planning; this includes detailed specification of the risks involved and their impact on divisional and Group earnings.
Risk control
HOCHTIEF draws up quarterly forecasts and analyzes causes of variance on an ongoing basis. Timely reporting allows management to spot risks early and take preemptive action.
Project risks are controlled by divisional contract review committees. These ensure that projects are only accepted if they are discernibly profitable and involve calculable risks.
All major investments are approved by the holding company Executive Board or by the Investment Committee. A Group-wide directive sets out standard investment appraisal criteria and procedures.
Business entities outside our managerial control - and the risks inherent in those entities - are overseen by our equity holding control function.
Divisions, corporate centers and the holding company Executive Board meet regularly to discuss risk-harboring developments and agree suitable action.
Monitoring and performance measurement
Transparent analysis and variance reporting ensure systematic monitoring of the outcomes of action taken. Earnings-linked pay incentivizes management to meet the binding targets laid down in the planning process.
