Exploit opportunities – avert risks.

Deutsche Telekom’s business environment is constantly in flux due to factors such as accelerated technological progress, intensifying competition and regulation. Systematic, forward-looking management of opportunities and risks is therefore needed.

Integrated management system.
Deutsche Telekom employs a holistic risk and opportunity management system. It integrates all strategic and organizational control and monitoring measures for managing risks and can be used to help identify, assess and manage all risks at an early stage. The same applies for our opportunities, which are analyzed primarily within the framework of strategy and innovation development activities. We produce comprehensive market analyses and derive from them the potential of specific customer segments and markets.

Independent reporting system.
Deutsche Telekom’s independent reporting system is standardized for the entire Group and organized independently. Group Risk Management has central responsibility for the efficiency of the methods and systems used and the functionality of the risk early warning system.

Decision-making basis for Group management.
Deutsche Telekom’s risk management function produces quarterly – or in the event of unexpected events, ad hoc – risk reports that form a basis on which the Board of Management makes decisions. The Board of Management informs the Supervisory Board, whose Audit Committee regularly looks at the risk management system and the risk report at its meetings.

Financial risks minimized.
Deutsche Telekom attaches particular importance to managing risks arising from financial positions. All treasury activities are conducted on the precept of minimizing risk. To this end, we record all financial transactions and risk items in a central treasury system. The Group management is informed about these positions on a regular basis. Deutsche Telekom only uses derivative financial instruments to limit market risks, but not for trading or speculative purposes.

Review passed.
The internal audit function regularly reviews the functionality and efficiency of our risk management processes. These reviews also monitor compliance with the regulations and guidelines contained in Deutsche Telekom’s risk management manual. Furthermore, the suitability of the risk early warning system for averting risks and developments that threaten the company is confirmed in the audit of the Annual Report. The system complies with the statutory requirements and conforms to the German corporate governance principles.