As an internationally active information business, Wolters Kluwer faces and manages various risks. These include business risks, such as the highly competitive and rapidly changing nature of our markets; changes in demand for products by customers; copyright infringements; and a rapidly changing technological environment. Other risks are financial in nature, such as currency movements, interest rate fluctuations, liquidity, insurance and credit risks.
Wolters Kluwer has implemented risk management and internal control systems in place. The purpose of these systems is to expose any significant risks to which the company is exposed, enable the effective management of these risks, meet strategic and operational objectives, ensure the reliability of the financial reporting, and, to the best of its knowledge, comply with relevant laws and regulations.
The company employs various mechanisms to ensure that adequate risk management and internal control systems are maintained:
- A standard annual planning and reporting cycle;
- Periodic business reviews;
- Standard financial and non-financial procedures and policies (including Letters of Representation that are signed quarterly by all CEOs and CFOs of all divisions and operating companies as well as relevant corporate staff members);
- Specific treasury policies on market, liquidity, and credit risk;
- Internal audits, to ensure compliance with policies and procedures and which detect and address internal control issues;
- An internal control dashboard that actively pursues all recommendations and outstanding issues coming from management reviews, internal audits and external audits;
- Hiring and retention policies and practices for top finance professionals.
The internal control systems are designed based on the COSO (The Committee of Sponsoring Organizations of the Treadway Commission) framework. The COSO recommendations aim to provide a reasonable level of assurance. These systems do not provide absolute assurance regarding the achievement of the company's objectives, or entirely prevent material errors, losses, fraud, and violation of applicable laws and/or regulations.
For further information, please see the Risk Management section in the Annual Report.