Philips 2008 Annual Report Download - page 96

In 2008, the global train-the-trainer program for
compliance awareness was expanded with regional/
area tailor-made GBP training programs for compliance
officers (which also provide for an annual refresher).
In addition, a GBP e-Learning tool for middle and senior
management was developed and rolled out in 2008.
Risk categories and factors
Taking risks is an inherent part of entrepreneurial
behavior. A structured risk management process
encourages management to take risks in a controlled
manner. Philips has a structured risk management
process that recognizes different risk categories,
namely Strategic, Market, Operational, Compliance
and Financial risks.
Strategic risks comprise threats and opportunities that
influence Philips’ strategic ambitions. The Market risks
cover the effect that changes in the market may have
on Philips. Risks related to areas such as economic and
political developments are likely to affect all market
participants in a similar manner. Operational risks
include adverse unexpected developments resulting
from internal processes, people and systems, or from
external events that are linked to the actual running
of each business (examples are solution and product
creation, and supply chain management). Compliance
risks cover unanticipated failures to enact, or comply
with, appropriate policies and procedures. Within the
area of Financial risks, Philips identifies risks related
to Treasury, Pensions, Legal and Fiscal.
designed to further clarify the existing GBP directives.
To ensure compliance with the highest standards of
transparency and accountability by all employees
performing important financial functions, the Financial
Code of Ethics contains, amongst other things, standards
to promote honest and ethical conduct, as well as full,
accurate and timely disclosure procedures in order to
avoid conflicts of interest. Philips did not grant any
waivers of the Financial Code of Ethics in 2008.
In order to further strengthen the employees’
awareness of the existence and importance of the
Philips GBP, and the new GBP directives in particular,
an internal communications program tailored to the
respective businesses was developed in 2008.
To ensure that GBP compliance officers are better able
to carry out their compliance function, their roles and
responsibilities profile and its organizational embedding
were clarified further in 2008. In particular, a more clearly
structured procedure for appointment (responsibilities
and authority, hierarchical structure and organizational
mandate/independence) was implemented. Furthermore,
the functional job assessment of compliance officers
is now mandatorily included in their annual People
Performance Management appraisal.
To reinforce awareness of the need for compliance
with the GBP, a web-based GBP training tool has
been rolled out throughout the Group in 22 different
languages, covering more than 95% of the employees
with on-line access. In the course of 2008 an updated
version of this web-based training was developed,
which will be rolled out in 2009. The new GBP directives
are an important part of this web-based training.
Strategic risks
- strategy
- industry
- acquisitions
- intellectual
property
- brand
Market risks
- economic &
political
- emerging markets
- competition
- governmental
investigations
- regulatory
Corporate Governance
Philips Business Control Framework
Philips General Business Principles
Operational risks
- solution creation
- supply chain
- global accounts
- personnel
- information
technology
- product liability
- reputation
Compliance risks
- business principles
- reporting &
disclosures
- privacy &
security laws
Financial risks
- treasury
(incl. liquidity)
- pensions
- legal
- scal
Philips Annual Report 200896
42
Our group performance
18
We care about...
8
Message from
the President
6
Performance highlights
14
Who we are