The external and internal factors outlined above carry a number of risks and uncertainties which, if left unaddressed, could adversely affect the achievement of the AGCO’s Strategic Goals. The AGCO leverages sound risk management methodologies through the continued use and enhancement of an Enterprise Risk Management Framework to monitor and mitigate these environmental risk factors.
The framework consists of a portfolio view of risks. An annual risk workshop is held with the senior management team to identify, assess, and decide on prioritization and mitigation activities for the AGCO’s top risks. These risks are updated at minimum on a quarterly basis to ensure they reflect the changing risk landscape. Risk assessment activities are integrated with strategic and corporate planning process to ensure that risks arising from the AGCO’s goals and plans are considered and assessed. The results of the risk assessment activities are a key input in the development of the AGCO’s audit and evaluation plan. The framework and associated processes are overseen by the Board of Directors who provide input on the process.
The framework assists in enabling the organization to identify areas of potential and existing risk and ensures that risk is routinely identified, assessed and overseen by the AGCO Board. This forms the basis of a systematic, disciplined and integrated approach to the management of risk.
The framework will continue to form a foundation to guide management decision-making processes when developing strategic plans and corporate planning activities. This ensures that the AGCO understands its business and operational risks and manages them to an acceptable level of exposure given its priorities and objectives.