LISI GROUP - Integrated report 2022

RESPONDING TO GOVERNANCE ISSUES 76 LISI – 2022 INTEGRATED REPORT RISKMANAGEMENT T he LISI Group is committed to a convergent risk management process. It manages its risk mapping based on the COSO reference system and by complying with the provisions of articles L-225.37 & L-225-68 of the Commercial Code on financial security, as well as the recommendations of the AMF. After conducting a risk identification and listing process on the basic management units (production or distribution sites), the Group consolidates all the risks to which it is exposed in a matrix showing the probability of occurrence and the level of severity. Then a “top down” approach makes it possible to prioritize these risks. Each significant risk identified is the subject of an action plan reviewed periodically, and, if necessary or in parallel, of a proactive approach for prevention, insurance coverage, accounting provisions, and operational actions. The rate of occurrence of major crises has accelerated over the past decade and the nature of these crises has diversified: the series of health, logistical and geopolitical crises between 2019 and 2022 is an example of this. The LISI Group must therefore face polycritical and protean crises, the amplitudes of which are increasing. To mitigate both crises and their impact, the Group has developed its structural agility, its internal communication, as well as its managerial system and has changed its understanding of the risks it faces. The major risk factors presented in this chapter constitute only the main risks identified and are likely to vary in intensity and probability, depending on global macroeconomic and geopolitical developments. The management routines put in place within the Group make it possible to update this map constantly and to introduce any measures aimed at controlling the impacts or the severity of the risks identified. The summary of major risks is presented under two headings: • the major operational risk factors specific to the Group’s activities, • the major risk factors external to the Group’s activities. Strategic risks are assessed annually by the Group’s sites, Business Groups and operational divisions as well as by General Management, and have been reported since 2021 in an internal collaborative platform. The 2022 risk assessment mentions a new risk, whose relevance is certain: asymmetric inflation.