Original perspective


In accordance with the provisions of its corporate social responsibility policy, proper risk management, striking a balance between the will to create value for its stakeholders and the risks associated with business, commercial, operational, labour, financial and social initiatives, is a priority for Viscofan. 

Underpinned by the ethics code of society and its values, this priority is present in the good corporate governance practices, ensuring an adequate distribution of functions, rights and responsibilities.

The company’s risk management system is founded on an ethics code establishing the ethical principles and behavioural guidelines complemented by internal regulations that can be divided into: general policies, specific policies and local policies.

This risk-management system and its derived policies are framed within the limitations established by the applicable legislation to the Viscofan Group’s business activity.

Mentioned policies have to be applied in all group companies over which effective control is exercised by Viscofan and concerns the company employees, including senior direction and Board of Directors itself.

Viscofan Group accounts with different internal bodies undertaking supervision and control of the different risks that may arise from the activity of Viscofan with more or less probability or materiality:

  • Board of Directors: The control and risk-management policy as well as the periodic monitoring of the internal information and control systems constitute one of the matters which are reserved for the full board’s hearing. The Audit Committee, part of the Board of Directors, is responsible for supervising the preparation and control of financial information in general, and of all processes implemented for this purpose. It is also responsible for supervising the internal audit function, the relations with external auditor and besides, it is a specific function of the Audit Committee to supervise the adequacy of the control policies and processes implemented and review the internal control and risk management system, in order for the main risks to be properly identified, managed and communicated.
  • Internal Audit Department: includes among its objectives the identification and assessment of any type of risk the organisation may face. For this purpose, it is authorised to examine and assess the systems and procedures for the control and mitigation of all risks, as well as the methodologies used.
  • The Global Risk Committee: is a collegiate body aimed at conducting in-depth studies of exposure to and analysis of risks affecting the company, evaluating its exposure to these risks and drawing up the recommendations and actions required to manage them within reasonable limits. This committee can therefore be described as a body in charge of the analysis, counselling and coordination of risk and risk management related matters.
  • The Corporate Responsibility and Compliance Committee: includes amongst its goals the supervision of specific risks to the company related to criminal liability or any other type of non-compliance.
  • The Ethics Committee is responsible for initiating, ex officio or at the request of a third party, investigations into any situation or practice that may put Viscofan Group at risk, whether due to non-compliance with Viscofan Group internal regulations or any other circumstances.
  • The Credit Risk Committee is a control and supervisory body that controls risks connected with corporate collection management. In this way, the supervision of the financial risk incurred when dealing with the group’s different customers is performed not only at locally but also at corporate level regularly and continuously.
  • Investment Committee: the main objective is to control and supervise compliance with the Investment Plan approved by the Board of Directors. 
  • Investment Committee: the main objective is to control and supervise compliance with the Investment Plan approved by the Board of Directors. 
  • The Senior Management’s task is to deploy and execute the strategy within the organisation, performing the monitoring, risk identification and control work relevant to it within its areas of activity. It is responsible for identifying and evaluating the risks which the Group faces in the course of its business and applying suitable measures either to prevent such risks from materializing or, should they arise, to reduce or eliminate their impact.
  • Viscofan Group employees. Finally, the remaining Viscofan Group employees shall comply with the measures in place in the risk control and prevention systems and, where applicable, report any behaviour they consider may be a possible risk to the Viscofan Group. In order to facilitate coordination tasks, better identify risks and risk prevention and control actions, certain individuals were identified at local levels who will coordinate their actions with the competent bodies at the corporate level. 

    As part of its regular work, the Global Risk Committee revised the map of existing risks in 2015 in accordance with the code of ethics, internal regulations and the Be MORE Strategic Plan.

  • It evaluated the risks identified in four categories, according to the COSO framework:

    Strategic risks: These are defined as those risks affecting goals at high level, in line with the company’s mission. The following have been identified as specific risks within this category:

    • Natural disasters
    • Country risk
    • Risks resulting from competitive environment
    • Reputational risk
    • Cybersecurity risk
    • Company ownership
    • Obsolescence risk due to innovation

    Information risks: Risks affecting the reliability of the information provided and objectives related to the availability of sufficient capital and resources to carry on with the company’s activity to achieve financial targets. The following have been identified as specific risks within this category:

    • Computing contingences
    • Preparation and integrity of the financial information
    • Financing policy and liquidity constraints
    • Exchange rate
    • Prime rate
    • Budgetary control
    • Pension plan

    Operational risks: Risks affecting those goals directly associated with the efficient use of resources and longterm continuous activity. The following have been identified as specific risks within this category:

    • Material damage
    • Business continuity
    • Energy market
    • Customer satisfaction 
    • Risk of transportation
    • Shortage of raw materials
    • Public liability 
    • Knowledge and know-how development
    • Labour force
    • Group cohesion
    • Food risk
    • Sabotage

    Compliance risks: These risks affect the objectives confirming compliance with applicable rules and regulations, including internal legislation, as well as protection of employees and society.

    • Environment
    • Occupational accidents
    • Safety and hygiene in the workplace 
    • Evolution of regulatory framework
    • Compliance with current multinational food legislation
    • Compliance with obligations arising from business transactions
    • Societal risks
    • Criminal liability of legal persons
    • Taxation

    The objectives were manifold:

    • To update the assessment of the risks identified in the inherent risks map,
    • To update the assessment of the residual risk map, taking into consideration the mitigation measures implemented,
    • To integrate the risks to the four main goals of the “Be MORE” Strategic Plan on force in 2015,
    • To valuate the need of the incorporation of new risk to the existing risk map system.

    Corporate risk management is not a simple linear process in which each component only affects the next one in line, but rather a multidirectional, iterative process in which one component may affect any other.

    All these measures are reflected in the internal regulations, in the process that governs the internal financial information and in the code of conduct implemented throughout the Group. 

    In this regard, the most significant changes made in 2015 were related to the elimination of risks associated with the vegetable food business following the sale of the IAN Group for €55.8 million cash, representing a capital gain of €0.4 million after tax. The risks associated with the pension plans in the USA were also reduced, as were, at a previous date, those associated with the German plans, situating the risk of these liabilities within tolerance levels which the Group considers acceptable.

    Within the objectives of excellence, the requirements regarding the control of risks identified have been tightened; in particular, the tolerance levels for risks associated with EHS, Environment, Health and Food Safety, and those associated with safety in the work place have been lowered considerably.

    As for the rising likelihood of occurrence, the risk of competitive intensity is still high in certain markets which are affected by, among other things, exchange rate fluctuations, growing geopolitical uncertainty, volatility in the macroeconomic environment, raw material and energy price formation, and some competitors’ need to improve their competitive positions. 

    Through the different organs of risk control and monitoring, the Viscofan Group tasked the Global Risk Committee to produce an inherent and a residual map for those risks which, due to their materiality, might compromise value creation for its stakeholders and, consequently, hinder the accomplishment of the objectives sought by its MORE initiatives:

    • Market growth: Viscofan’s positioning as global market leader
    • Optimization: cost reduction and efficiency
    • Return: creation of value for stakeholders, with respect to the objectives set out by annual budget.
    • Excellence: protection of Viscofan’s culture and values, improvement of service, quality, commitment to the protection of human rights, safety and environment.

    Knowing where each risks sits on the inherent and residual maps calls for continuous dialogue with the company’s stakeholders through the channels established by the company. This system allows the company to gauge how well the measures adopted have performed in terms of mitigating the risk, focus its attention on those risks which are still beyond the comfort zone and apply further corrective and preventive measures in order to reduce the impact and/or likelihood of the risk occurring. 

    The Global Risk Committee meets at least twice a year to review and identify the risks inherent to the business, although additional unidentified risks may exist which may hinder accomplishment of the Viscofan Group’s objectives.



    E1 Natural Disasters

    E2 Country risk 

    E3 Competitive risk. Competition  

    E4 Competitive risk. Customers    

    E5 Competitive risk. Substitute products    

    E6 Reputational risk    

    E7 Company ownership    

    E8 Obsolescence risk due to Innovation   

    E9 Cybersecurity risk  


    I1 Computing contingences

    I2 Preparation and integrity of the financial information

    I3 Financing policy

    I4 Exchange rate

    I5 Prime rate

    I6 Budgetary control

    I7 Pension Plan


    O1 Material damage risk    

    O2 Business continuity risk    

    O3 Energy market    

    O4 Customer satisfaction   

    O5 Risk of transportation    

    O6 Shortage of raw materials   

    O7 Public liability 

    O8 Know-how   

    O9 Labour force    

    O10 Group cohesion    

    O11 Food risk  

    O12 Sabotage


    C1 Environment    

    C2 Work-related accidents    

    C3 Safety and hygiene in the workplace    

    C4 Evolution of regulatory framework    

    C5 Compliance with food legislation    

    C6 Compliance with obligations arising from business transactions    

    C7 Societal risks    

    C8 LOPD    

    C9 Criminal liability of legal persons    

    C10 Taxation 

    Chief risks which materialised in 2015

    It is important to point out that risk is inherent to business activity and the actual company diversification, at a geographic level (sales and production), and with regard to the product range, is a measure in itself that mitigates the risks identified on the risk map. However, this global nature also means that, during the fiscal year, adverse circumstances also develop, making it difficult to achieve the objectives established in the budget for 2014.

    Nevertheless, the measures implemented and the quantification of these risks did not prevent the main financial objectives defined and communicated to the investing community from being reached in the tax year.

    In this context, some of the risks to materialise with the most significant impact, are as follows:

    Financial risk exchange rate

    The global economic situation and the economic and monetary policies conducted by the competent authorities in the various countries have given rise to the fluctuation of a number of currencies in which the Group operates, with particular mention of the Brazilian Real and the USA Dollar, not only in average terms, but the volatility between maximum and minimum exchange rate values was particularly significant in the course of the year

    Functioning of the control systems

    Viscofan attentively watches for opportunities to take out exchange rate hedges, endeavouring to cover the transaction flows between different currencies, as required by circumstances. Over the last few years, the company has strengthened the treasury team and has contracted information systems in order to improve the hedging capacity to minimise risk at a lower cost.These hedges, however, may have been taken out at less favourable costs than the final spot prices.

    Operational risks: energy costs

    2015 was characterised by extremely volatile energy prices

    Functioning of the control systems

    Viscofan is making considerable investments directed at optimising energy costs from a financial and environmental point of view. In turn, when dictated by circumstances, the company makes hedging on energy prices, involving a reasonable cost or reducing the budget compliance risk. Nevertheless, the volatility of energy prices, and the reduction in the Brent price have meant that certain hedges have been made at a higher cost than the spot price, or that the investment payback periods have been greater. However, the risk control measures have meant that the energy costs are for a reasonable amount with regard to the budget approved.

    Competitive environment and market risk

    As a result of a strong US dollar compared to other currencies, some competitors focused their commercial and promotional efforts on the US market.

    Functioning of the control systems:

    This market has been monitored, maintaining disciplined commercial policies which will not harm the financial performance objectives. The projects specific to the USA which aim to enhance our levels of service and quality have been strengthened in order to protect our market share better in adverse scenarios.

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