Philips 2010 Annual Report Download - page 104

7 Risk management 7 - 7.1
104 Annual Report 2010
7Risk management
Introduction
The following section presents an overview of Philips’
approach to risk management and business controls and a
description of the nature and the extent of its exposure to
risks. Philips’ risk management focuses on the following
risk categories: Strategic, Operational, Compliance and
Financial risks. These are further described in section 7.2,
Risk categories and factors, of this Annual Report. The
risk overview highlights the main risks known to Philips,
which could hinder it in achieving its strategic and financial
business objectives. The risk overview may, however, not
include all the risks that may ultimately affect Philips. Some
risks not yet known to Philips, or currently believed not to
be material, could ultimately have a major impact on
Philips’ businesses, objectives, revenues, income, assets,
liquidity or capital resources.
All oral and written forward-looking statements made on
or after the date of this Annual Report and attributable to
Philips are expressly qualified in their entirety by the
factors described in the cautionary statement included in
chapter 20, Forward-looking statements and other
information, of this Annual Report and the risk factors
described in section 7.2, Risk categories and factors, of
this Annual Report.
7.1 Our approach to
risk management
and business
control
Risk management forms an integral part of the business
planning and review cycle. The company’s risk and control
policy is designed to provide reasonable assurance that
objectives are met by integrating management control
into the daily operations, by ensuring compliance with
legal requirements and by safeguarding the integrity of the
company’s financial reporting and its related disclosures.
It makes management responsible for identifying the
critical business risks and for the implementation of fit-
for-purpose risk responses. Philips’ risk management
approach is embedded in the areas of corporate
governance, Philips Business Control Framework and
Philips General Business Principles.
Financial Compliance Strategic Operational
Corporate Governance
Philips Business Control Framework
Philips General Business Principles
Risks / Opportunities
Corporate governance
Corporate governance is the system by which a company
is directed and controlled. Philips believes that good
corporate governance is a critical factor in achieving
business success. Good corporate governance derives
from, amongst other things, solid internal controls and
high ethical standards.