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2.7 Management report on the Group Expected developments and and associated opportunities and and risks risks Pages 174-176 174–176 Pages 99–100. 99–100 In extensive training programs and an interactive compliance e-learning program, we inform our employees about compliance requirements, infringement risks and potential sanctions. In 2010/2011 more than 3,500 employees worldwide took part in classroom training sessions. To supplement the compliance training program, we have introduced a Groupwide interactive e-learning program comprising modules on competition law and combating corruption, which is available in eleven languages. The second cycle of the e-learning program which started in August 2008 is aimed at refreshing the knowledge of employees who have taken part previously and for the first time training employees outside Europe. Since the launch of the second cycle, 25,600 employees worldwide have completed online training courses on competition law and anti-corruption policies. A report on pending litigation and claims for damages can be found in the Notes. Regulatory risks Our business operations are in some cases closely dependent on the legal framework at national or European level. Developments such as changes to competition rules in individual sections of the markets can involve risks for us and lead to higher costs or other disadvantages. To contain these risks we maintain close working contact with the relevant institutions to prevent distortion of competition. Based on model calculations, we will face substantial costs for emission allowances in the third trading period of the EU Emissions Trading Scheme from 2013 to 2020. As an energy-intensive industrial and services group we face earnings risks if we are unable in the competitive international market to pass on to our customers all or any of the additional costs. ThyssenKrupp participates both directly and via industry associations in the discussion process on politically desired energy price surcharges. Environmental risks Due to the production processes in our industrial plants, we are exposed to process-related risks that can lead to air and water pollution. ThyssenKrupp continuously invests in sustainable environmental protection in our production operations so as to conserve resources and minimize environmental impact over the long term. Many Group companies have established certified environmental management systems which reduce the risk of environmental damage. Some of our real estate no longer used for operations is subject to risks from past pollution and mining subsidence which we contain with preventive measures and scheduled remediation work. Our real estate area recognizes adequate provisions for this every fiscal year. Risks associated with information security We continually review our information technologies to ensure the secure handling of IT-based business processes and reduce risks. If necessary, the systems are updated and protected even more effectively. Further, measures are in place to maximize information security awareness and provide the necessary technical support for all employees. The IT-based integration of business processes is subject to the condition that the risks involved for our Group companies and business partners are minimized. In the reporting year we therefore again carried out extensive measures to further improve our security standards and our information security management system. 114
Management report on the Group 2.7 Management report on the Group Expected developments and associated opportunities and risks Pages 96–99. Pages 96–99 Pages 102-104 Pages 102–104 114 | 115 Various business processes and data centers attained security certification which documents the standard achieved for our customers. In the new ThyssenKrupp Quarter in Essen we raised the standard of security significantly: By incorporating state-of-the-art technologies from the planning stage we were able to achieve an appropriate level of protection. Regular tests are carried out – in some cases with external support – to check whether our IT infrastructure is vulnerable to hacking. If necessary increased protection is introduced immediately. In addition we have established a Groupwide program to guarantee segregation of duties in ERP (Enterprise Resource Planning) systems in accordance with the principle of dual control. This minimizes risks for numerous business processes at authorization level. Together with the Group’s data protection officer, our experts ensure that personal data are processed only in accordance with the rules of the German Data Protection Act. All these measures allow us to continue to protect the Group’s business data as well as the privacy of our business associates and employees through preventive action and to respond appropriately to potential new risks. Risks associated with pensions and healthcare obligations The fund assets used to finance pension liabilities are exposed to capital market risks. To minimize these risks, the individual investment forms are selected and weighted on the basis of studies by independent experts. The aim is to adjust the investments to ensure that the associated pension liabilities are permanently fulfilled in respect of the current and future income from the investments. Pension obligations are subject to risks from increased life expectancies of beneficiaries and from obligations to adjust pension amounts on a regular basis. In addition, the cost of healthcare obligations in the USA may increase. Furthermore, in some countries there is a risk of significantly higher payments having to be made to finance pension plans in the future due to stricter statutory requirements. In individual cases, the premature cancellation of a pension plan may necessitate an additional allocation. Personnel risks Our staff and managers with their commitment to ThyssenKrupp are of central importance to our success. To find key personnel to fill vacancies and avoid losing competent employees, we position ourselves as an attractive employer and promote the long-term retention of employees in the Group. We offer executives an ongoing management development program, career prospects and attractive incentives, while our staff receive targeted mentoring. We inform interested young people about career opportunities at ThyssenKrupp from an early stage and support apprentices as they start work. Our cooperation with key universities and early contacts with talented students also help us secure the young people we need for our workforces. General economic risks We expect further growth of the global economy in 2012. However, our forecasts are subject to great uncertainties. For the industrialized countries there is a risk of a further slowdown in the economy, in particular on account of the debt crisis in some countries and the associated turbulence on the financial markets. If growth in the emerging countries fails to match expectations, the risk of a global economic downturn will increase. This would impact demand on the markets important to us.
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Annual Report 2010/2011 At the cent
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Our mission statement We are Thysse
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Making tomorrow possible Our engine
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