Group Management Report Products Safety and Health Environment Human Resources Social Commitment Consolidated Financial Statements 73
mance (IT risks). In addition, potential risks arise from data
loss or theft of business secrets. ALTANA attaches great
importance to smooth availability of IT applications and ser-
vices.
To guarantee this, corresponding processes and organi-
zational structures have been established. Emergency plans
are in place in case of significant disruptions or losses of data.
Delivery of faulty products can cause damage to peo-
ple, property, or the environment and thus cause liability risks.
This can have significant effects on the Group’s asset sit-
uation. We minimize this risk by standardizing production
processes to a large extent and by taking comprehensive
quality-control measures. In addition, we continually conduct
analyses to assess the hazardous potential of our input ma-
terials and products, and we conclude insurances.
Changes in political and regulatory framework condi-
tions can lead to restrictions on trade or foreign-exchange
transactions. Due to political unrest, it can be more difficult
or even impossible to access the Group’s assets in the
country or countries in question. On account of regulatory
adjustments, it might no longer be possible to process or
sell certain products or ingredients, or only with strong restric-
tions. We continually examine the political environment
in the countries important for us and take current tendencies
into account when evaluating business relationships. We
only make direct investments in countries in which we assume
the political environment is highly stable. We actively take
part in legislative procedures and discussions focusing on
changes in the regulatory environment. As a result, we
can anticipate possible new requirements early on.
Legal violations (compliance risks) can give rise to liability
risks or tarnish our reputation, which can have a signifi-
cant effect on the Group’s earnings and asset situation. We
counter these risks within the framework of our compli-
ance management system, inter alia by regularly informing and
training our employees about relevant legal requirements.
would then no longer be able to use it, or only at additional
cost.
With our innovation culture, which is put into practice
at all levels of our organization, we highlight the importance
of innovation and safeguard its status. Both at a decen-
tralized and a Group level, we continually evaluate and con-
trol our research and development activities based on fi-
nancial and non-financial criteria. By investing above-average
amounts in research and development and focusing on
product adjustments and new developments, we can contin-
ually introduce products on the market that are tailored
to customers’ individual and current needs and thus heighten
our competitive edge.
It is important to protect knowhow we develop with
patents to convert our knowledge edge into economic suc-
cess. This includes safeguarding technologies as well as
methods and product properties we currently use so that
other companies cannot patent them.
In 2017, there was no significant change in our assess-
ment of innovation risks in comparison to the previous year.
Other Risks
Production risks concern technical disruptions or human fail-
ure in production that can be harmful to people or the
environment. Our goal is to minimize the effects of machine
failure on the value chain by operating production lines
independently from one another. It is compulsory for our staff
to receive training in the clearly defined process and quality
standards in the areas in question. In addition, we conclude
property damage as well as plant and equipment break-
down insurances.
Information technologies form the basis of nearly all
of ALTANA’s business and communications processes. Breakdowns
or other disruptions of IT systems can lead to far-
reaching impairments in all of the Group’s value-added stag-
es, which can have significant effects on business perfor-