Boskalis Annual Report 2020

62

RISK MANAGEMENT

The proper identification, assessment and management of risks and opportunities – notably with respect to tendering, preparation and execution of projects – is an integral part of our management approach allowing us to capitalize on opportunities in a disciplined manner. For several years already, we operate a group-wide quality management system which we refer to as the Boskalis Way of Working (WoW). In designing this system, we observed the principles and guidelines of the ISO 31000 standard for risk management. The overriding objective of our WoW-system is to give our staff the best possible support in achieving operational excellence throughout the project lifecycle, with a clear focus on safe and sustainable solutions as well as a consistent client approach. Operational excellence in this context means achieving compliance with the internal and external control requirements imposed on our primary project process whilst minimizing failure costs. We monitor compliance and identify opportunities to further improve our performance by conducting regular internal audits, inspections, emergency drills, and management reviews. For all business units, external certification bodies have (re-)confirmed that the implementation of WoW complies with the most recent applicable international (ISO) quality, safety and environmental standards. We are continuing our efforts to further improve and harmonize (the documentation of) this system. Our tolerance or appetite for risks is documented in the Group’s guidelines, policies, procedures and instructions. Examples include the Boskalis Code of Conduct and the Supplier Code of Conduct, safety and quality policies and procedures, vendor selection criteria, project risk classification system, contracting guidelines, authorization limits, tax and treasury policies, management planning and control systems, financial control framework, crisis management plans, information security and access management policies. Below sets out an overview of what we currently consider to be the most important strategic, operational, compliance, financial (reporting) and other risks we face in pursuing our business objectives. This overview is not exhaustive and risks have not been ranked in order of importance. There may be other risks which we currently do not consider to be significant but which at a later stage may manifest themselves as such. Where possible, we have indicated the specific measures in place to help mitigate these risks. STRATEGIC AND MARKET RISKS The Boskalis markets are heterogeneous and often develop disparately. Our main (end) client groups are national, regional and local governments, or associated institutions such as port authorities, private port operators and major international oil and gas companies and wind energy companies (operators as well as contractors). Other client types are (container) shipping companies, ship and offshore construction yards, insurance companies, mining companies and (infrastructure and real estate) project developers. Notwithstanding the positive long-term growth prospects for our markets, they can be – certainly in the short and medium term – negatively impacted by factors outside our control. Such factors include for example general or regional geopolitical developments, such as energy policies, political unrest, piracy, government-imposed trade barriers, volatility in the energy and commodities markets as well as natural or man-made calamities. The COVID-19 pandemic being a telling recent example.

report of the board of management ANNUAL REPORT 2020 – BOSKALIS

Boskalis aims to respond as effectively as possible to both positive and negative developments in individual markets, through a global spread of its activities, an extensive and versatile fleet