RISK MANAGEMENT AND CONTROL
Grifols’ risk management system extends to all of the companies in the group, including investee firms.
The company’s risk control and management policy aims to provide greater security to patients, donors, employees, shareholders, clients, suppliers and other stakeholders by anticipating, controlling and managing risks to which Grifols is exposed. It comprises specific risk policies which are formulated within a risk control and management framework.
Grifols’ Board of Directors is responsible for approving the company’s risk control and management policy. The Audit Committee, in turn, supervises the effectiveness of the risk control and management system with the support of the Internal Audit Department. The senior management team oversees the risk management process, identifying and evaluating relevant risks and determining appropriate responses.
Grifols’ risk control and management system is founded on the following principles
Establishment of a risk tolerance framework, which reflects the levels of risk that the company deems acceptable and consistent with its corporate objectives
Leadership of senior management to allocate the necessary resources
Integration in management processes, especially strategic and planning processes
Segregation of duties among business areas, especially the areas of supervision and quality assurance
Integrated approach and corporate alignment to ensure all risks adhere to the same identification, assessment and treatment process
Regular reviews of risk-related best practices, the system’s strength and effectiveness and recommendations
GRIFOLS MANAGES THE ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) SUSTAINABILITY RISKS AND PAYS SPECIAL ATTENTION TO THOSE ASSOCIATED WITH CLIMATE CHANGE, HUMAN CAPITAL AND TALENT
The primary risk factors to which Grifols is exposed are outlined in its risk control and management policy. These include:
- Regulatory risks: Arising from regulatory changes or from changes in social, environmental or tax regulations.
- Market risks: Related to Grifols’ financial results and assets to fluctuations in market prices and other variables, such as exchange rates, interest rates, prices of raw materials, prices of financial assets and others.
- Credit risks: Possibility of counterparties failing to perform their contractual obligations and generating an economic or financial loss for the company.
- Business risks: Uncertainty regarding the performance of key variables inherent in the Grifols business: demand, supply of raw materials and new competitive products.
- Operational risks: Resulting from inadequate internal procedures, technical failures, human error or due to certain external events. Operational risks also include legal risks and fraud, as well as those related to information technologies and cybersecurity.
- Reputational risks: Potential negative impact resulting from changes in the perception of Grifols among various stakeholders.
The company also takes into consideration sustainability risks, including environmental, social and governance (ESG) risks, with an emphasis on those related to climate change, human capital and talent acquisition.
- Environmental risks: Grifols’ environmental policy aims to minimize the environmental impact of new products and developments, among other things; to ensure compliance with applicable legal requirements and other principles to which the organization subscribes; and to implement pollution-prevention techniques. Therefore, it relies on the Environmental Committees of the companies that form part of the group to assess their environmental management, evaluate and decide on priority actions; and assess possible environmental impacts when establishing work processes.
- Social risks: With regard to potential social risks, Grifols’ quality system addresses the entire production process, from procurement of raw materials to distribution of the finished product, in order to mitigate the risk of releasing a product on the market that could compromise its quality, effectiveness or safety. The company has claims and pharmacovigilance control system to rapidly detect any possible problems related to a product’s quality, efficacy or safety and promptly adopt corrective measures. In addition, a product’s traceability control systems also allow for the rapid and effective withdrawal of any product batch from the market.
Our employees’ safety standards are thoroughly documented and are more rigorous than those required by law. Product liability and potential incidents at Grifols’ facilities are covered by comprehensive risk management policies and insurance programs.
- Governance risk: The company has policies established related to Corporate Social Responsibility, communication with financial markets and compliance with best practices regarding tax matters, among others, in order to minimize the potential of this risk.
At the date of preparing its consolidated annual accounts, Grifols has adopted the measures it considers necessary to mitigate any possible effects arising from the aforementioned events.