We attempt to identify, analyse, evaluate, monitor and control risks to the company using an on-going systematic process. Environmental risks, climate change or complex supply chains are also taken into account in a holistic approach. We try to control economic, social and ecological risks with established management approaches and systems.
Swisscom's company-wide risk management system covers the entire group and takes into account external and internal events. Swisscom observes the established COSO II and ISO 31000 standards. The Swisscom risk management system thus complies with the various requirements of its own corporate governance and those of Swiss law.
Risks are driven by changes in markets, competition and customer behaviour, as well as by technology, the regulatory environment, and policies. The importance of established telecoms services is continuing to decline, and the associated loss of revenue from the traditional core business must be compensated by growth in customers and volume as well as new services. Over the long term, the trend in the ICT market will necessitate fundamental changes in the approach to risks related to the business model, technology and human capital. Forthcoming decisions of a regulatory nature entail a latent risk which can have an impact on Swisscom's financial development.
Swisscom is exposed to various financial risks resulting from business and financial activities. The main financial risks arise from changes in foreign exchange rates, interest rates and the creditworthiness and solvency of other parties. A further risk is involved in securing solvency.
Swisscom's partners provide goods and services in the region of five billion Swiss francs annually. Swisscom attaches importance to fair and efficient partnerships with suppliers, who share its social and ecological goals and values. Along with them Swisscom commits itself to preserving the environment and aims to improve the working conditions of more than two million people by 2020.
The Board of Directors is responsible for the establishment and monitoring of the group-wide assurance functions of risk management, internal control system for financial reporting, compliance management and internal auditing. The internal audit unit, which is directly responsible to the chairperson of the Board of Directors, verifies compliance with corporate governance guidelines across the group. In addition to regular audits, it provides a confidential anonymous whistleblowing system, in which special audits can be initiated by all employees.
At the behest of the Board of Directors, the Audit Committee verifies the qualifications, independence and performance of the statutory auditors as a state-supervised auditing firm. The statutory auditors are appointed annually by the Annual General Meeting. Since 1 January 2004, KPMG Ltd based in Muri bei Bern has acted as statutory auditor of Swisscom Ltd and its Group companies – with the exception of its Italian subsidiary Fastweb, which has been audited by PriceWaterhouseCoopers SpA.
A fundamental pillar of Swisscom's sustainability strategy is a coherent, responsible fiscal policy. Swisscom attaches importance to paying its fair share of taxes in every country in which it conducts business. Swisscom‘s earnings are allocated in compliance with local and international provisions and standards (such as OECD guidelines), and in observance of the arm's length principle, to the countries in which the income was generated.
Swisscom condemns corruption of any kind. Swisscom's business activities are conducted in a fair, honest and transparent manner. Swisscom has taken many organisational precautions to avoid corruption. An anti-corruption directive and various guidelines define correct and incorrect conduct. Employees exposed to the risk of corruption receive special training. The Group Compliance division supervises implementation of the requirements. Finally, all employees can take advantage of a confidential anonymous whistleblowing system.
Aside from economic risks we also attempt to identify and control ecological and social risks. For instance, climate change or complex supply chains involve risks that we continuously evaluate in our risk management system and try to minimise by means of appropriate action.
All information valid as of 31 December 2016
Subject to modification without notice. Errors excepted.
The printed version of the 2016 Annual Report is authoritative