Risks are an inherent part of any business activity. A risk management approach that identifies, analyzes, controls, and monitors all significant risks in a company’s environment is therefore enormously important. A risk management approach also uses detailed analysis of the business environment as well as automated planning, control, and information systems to identify opportunities.

In order to identify risks as well as opportunities at an early stage, HUGO BOSS regularly reviews internal and external risk factors that could influence the Company’s success. The Company’s business strategy identifies four ways to handle risks: avoidance, reduction, transfer, or acceptance. To the extent possible, HUGO BOSS insures against risks that could endanger the Company’s existence.

The risk catalogue is the central element for risk management. It is used both to control risk analysis and risk management processes, and to centrally summarize all risks. Risk identification and responsibility occurs at the local level; risk documentation and reporting is managed by a central risk controlling department.

The risk catalogue categorizes internal and external risks. Internal risks are subdivided into strategic, financial, operational, and organizational risks. For each category and its subgroups, employees from the various departments and divisions are assigned to record the risks systematically and in detail, and to take responsibility for proper management of each risk. All risks are reviewed by the responsible managers at least once annually to ensure that they reflect current reality. Individual risk entries are revised or supplemented as necessary. At the same time, the extent of damages and probability of occurrence are recalculated and quantified.

To make monitoring easier, the risk catalogue also specifies early warning indicators for the timely identification of irregularities. Should a risk materialize, reporting chains are triggered and appropriate pre-defined countermeasures are initiated to guarantee a rapid response.

The risk management system thus meets the legal requirements. The HUGO BOSS Group is able to identify risks at an early stage and to respond quickly and appropriately. The risk management system is also audited at regular intervals by the internal auditing department to ensure its proper functioning, and by the independent auditor as part of the year-end audit of financial statements. The independent auditors confirm its appropriateness and proper functioning.