Key features of the risk management process
HOCHTIEF deploys and continuously fine-tunes integrated planning, control and monitoring
systems to ensure early risk detection, appraisal and management.
Planning as part of risk management
In planning, ideas for the strategic direction of our enterprise are developed and evaluated by
analyzing our business environment and evaluated by analyzing our business environment and market
position. Once a strategy has been adopted, binding targets are set for operational planning;
this includes detailed specification of the risks involved and their impact on divisional and Group earnings.
Risk control
HOCHTIEF draws up quarterly forecasts and analyzes causes of variance on an ongoing basis.
Timely reporting allows management to spot risks early and take preemptive action.
Project risks are controlled by divisional contract review committees. These ensure that
projects are only accepted if they are discernibly profitable and involve calculable risks.
All major investments are approved by the holding company Executive Board or by the Investment
Committee. A Group-wide directive sets out standard investment appraisal criteria and procedures.
Business entities outside our managerial control - and the risks inherent in those entities -
are overseen by our equity holding control function.
Divisions, corporate centers and the holding company Executive Board meet regularly to discuss
risk-harboring developments and agree suitable action.
Monitoring and performance measurement
Transparent analysis and variance reporting ensure systematic monitoring of the outcomes of action
taken. Earnings-linked pay incentivizes management to meet the binding targets laid down in the planning process.
