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Organization & System  

Risk Management Organization

The Managing Board is responsible for risk management in the company and, supported by the Corporate Risk Office, has designed and implemented a risk management system and a risk management organization. The system and the organization are documented in the DSM risk management policy, the DSM Code of Business Conduct, DSM policies in several functional areas and the DSM Corporate Requirements and Directives. The aim of the system is to ensure that the extent to which the company’s strategic and operational objectives are being achieved is understood, that the company’s reporting is reliable and that the company complies with relevant laws and regulations.
Figure 1: DSM’s overall governance structure

Risk Management System

The DSM risk management system is based on the COSO-ERM framework. It has been designed to achieve maximum integration of the risk management process in the normal business processes. It provides for risk assessment tools, controls for risks that commonly occur in the company and monitoring and reporting procedures and systems. The internal controls for the goods and money flows have been ‘built into’ business processes, and tools have been developed to support their implementation and to monitor their effectiveness in operation. In this way, a high level of internal control is achieved efficiently.

Risk management as part of the governance structure

DSM’s overall governance structure is depicted in Figure 1 (above), showing the main governance levels and the most important governance elements and regulations at each level. For DSM, as a company listed on the Amsterdam stock exchange, the primary references for good corporate governance are Dutch law and the amended Dutch corporate governance code 2008 (Frijns Code).

Note: All internal regulations apply in addition to applicable national and international laws and regulations. In cases where internal regulations are incompatible with national or international laws and regulations, the latter prevail.

Risk management starting points

The functioning of the system in 2015

Full details of the  functioning of the system in 2015 can be found in the Integrated Annual Report 2015.