Sidenor Corporate Report 2019

21 Risk management system In 2019, the Company Management worked to identify the risks, associated with internal or external factors, to which the organisation is exposed. To this end, it defined a risk map which, apart from identifying these risks, enables their prioritisation on the basis of a matrix of probability and impact on strategic objectives. In addition, in order to encourage supervision in this matter, we have approved a Risk Control and Management Policy, which aims at establishing a general framework for action, as well as the procedures and responsibilities for the control and management of the risks that Sidenor needs to face in an efficient and effective way. Thanks to Sidenor’s Risk Management System, it can be reasonably ensured that all risks identified (strategic, operational financial, compliance risks) are prevented, evaluated, submitted to continuous follow-up, and reduced to the assumption and tolerance levels defined by the Management. The aim is to achieve an environment where there is capacity to work with risk in a controlled manner. Sidenor is carrying out various action plans in order to mitigate the impacts of the risks identified in the short, medium and long term. The main non-financial risks identified at Sidenor are the following: Talent Managing the growth and sustainability of the Company requires the strengthening and development of people. Working conditions must be able to attract the best professionals. Succession It is necessary to identify people who are key and with potential in the Company, in order to ensure its continued existence and the maintenance of know-how. Cyberrisks Information Systems may fail, be damaged or attacked, thus jeopardising the Company’s activity as well as affecting or hindering its normal operation. A significant effort is thus necessary in order to better secure systems and to plan how to act in case of a cyberattack. Quality In the market in which the Company operates, it is essential to maintain high quality standards; otherwise, the Company’s image might be affected, and the organisation might suffer a loss of customers or an increase in its costs. Cyclical business Changes in market tendencies might occur; for this reason, the Company needs to be flexible and prepare for such changes, especially in the automotive market. M&A Risks associated with M&A operations which aim at the growth and diversification of the Company. New competitors The Company operates in a highly competitive environment and, in order to maintain or increase its market share, it needs to be prepared to compete with potential new competitors. Culture and organisation The implementation of the Company’s Strategic Plan requires the culture and values of Sidenor to reach all areas of the organisation. OPERATIONS AND INFRASTRUCTURE STRATEGY AND PLANNING GOVERNANCE