— Corporate governance — Risk management
Risk management
At medmix, risks are assessed regularly as part of the company’s integrated risk management process. The procedure to understand and manage risk is based on a landscape framed by medmix’ objectives and operating environment. medmix ERM involves viewing risk holistically across the organization. Both insurable and non-insurable risks are identified, with the objective to eliminate, mitigate or transfer such risk or prepare to accept them. The medmix ERM embodies the organizational culture of prudent risk-taking and is the process of identifying, assessing, and responding to risks, and communicating the outcomes of these analyses in a timely manner. The executive management encourages a strong organizational culture and awareness of risk to ensure that the organization can overcome the factors that inhibit effective risk management.
The analysis of the external and internal context shows the environment in which medmix seeks to define and achieve its objectives.
The primary external influences relate to the social, cultural, political, legal, regulatory, financial, technological, and economic environments within which medmix operates. These external influences occur at international, national, state, regional or local levels. Influences on the internal environment for medmix include medmix current operations and business objectives.
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External Risks |
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Risk |
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Rationale |
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Management Activities |
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Business Interruption |
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Mitigate |
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Factory disrupted or unable to operate. Leads to economic impact, contractual risk and reputation risk |
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1. Unable to operate site (China zero-Covid policy) 2. Lead time and capex of relocation, capacity constraints 3. Delay in equipment commissioning 4. Duplicates reduced profitability |
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1. Global footprint (limit single site risk) 2. Deploy BCP and crisis management system 3. Risk management guidelines 4. Obtain business risk insurance 5. Monitor climate change impact, pandemic and policy decisions |
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Supply Chain Disruption |
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Anticipate |
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Unable to source (energy, raw material, transportation, or equipment) on time and in the required quantity |
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Inability to source and ship, delays and inflate growth and sales plans |
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1.Global procurement (avoid single source) 2. Deploy regional inventory and logistics models to mitigate global products availability concerns 3. Global monitoring of supply chain risks |
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Export Trade Restrictions |
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Reduce |
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Breach of regulations drives breach of law, fine, denied export status, liabilities |
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Unable to continue shipping, liability, reputation |
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1. Monitor regulatory space & trends 2. Leverage digital solutions 3. Resource increase in Export/Trade |
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Product Regulations |
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Reduce |
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medmix portfolio becoming partly unfit due to regulations changes on products |
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Enaction of laws restricting the use of disposable products; New legislation from taxes to bans |
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1. Monitor regulations and trends (quality or regulatory) 2. Assess customers evolving demand and the fitness of the portfolio 3. Assess alternatives in product R&D |
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Intellectual Property |
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Reduce |
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medmix unable to defend its technology and patent portfolio, and commercialize its new products |
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Unable to sell or price our products |
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1. Fiercely defend IPR 2. Thorough IP clearance study before product introduction 3. External vendors scanning of competitors/copier products 4. Strong IP protection of product portfolio, improvements, and of brands 5. Embed IP in M&A processes |
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Compliance |
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Reduce |
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Non-compliant or unethical behavior leading to contract breach, reputational damage, fines and liability |
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1. Growth focus on both China and Healthcare 2. Move to more regulated industry, compliance with complex local laws |
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1. Active fostering of high ethical standards by tone from the top and middle management 2. Monitoring and assessment of potential exposure 3. Wide roll out of Code of Business Conduct and supporting rules (e.g., anticorruption, antitrust, trade control) 4. Third-party due diligence process 5. Compliance training (incl. e-learning) and audits 6. Speak-up culture, compliance hotline and sanction checks |
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Internal Risks |
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Risk |
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Rationale |
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Management Activities |
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Finance: No Secure Financing |
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Reduce |
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Unable to secure financing for growth due to a) size b) age of medmix c) economic conditions |
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1. Unable to invest in its future, miss acquisitions or technological evolution, lose leadership 2. Unable to invest in infrastructure: cost base required to grow and deliver profit expectations |
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1. Promote medmix to investors and finance community 2. Proactively identify source of funds |
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HR: Resource Optimization |
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Reduce |
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Inability to effectively allocate human resources and/or secure new qualified resources, or optimize business activities |
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Failure to attract, retain and develop people: higher cost of doing business |
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1. Anchor people and performance efforts to company’s values and behaviors 2. Ongoing feedback through surveys 3. Robust internal communications 4. Ongoing engagement in collaborative activities 5. Visible development opportunities 6. Consistent approach to salary grading 7. Identify talents & deploy retention measures 8. Promote medmix as an employer of choice |