RISK MANAGEMENT STRATEGY

O U R C O M M I T M E N T

DOW IS COMMITTED TO USING RESOURCES MORE EFFICIENTLY,

PROVIDING VALUE TO OUR CUSTOMERS AND STAKEHOLDERS,

DELIVERING SOLUTIONS FOR CUSTOMER NEEDS AND ENHANCING

THE QUALITY OF LIFE OF CURRENT AND FUTURE GENERATIONS.

AS PART OF OUR TRANSPARENCY, AND ACCOUNTABILITY TO

ACHIEVING OUR SUSTAINABILITY GOALS, WE INVITE YOU TO

VIEW OUR MOST RECENT PUBLIC REPORTS.

RISKMANAGEMENT DEFINED

BUSINESS R ISK : THE PROBABILITY OF LOSS INHERENT IN AN

ORGANIZATION’S OPERATIONS AND

ENVIRONMENT THAT MAY IMPAIR ITS

ABILITY TO PROVIDE RETURNS ON

INVESTMENTS.

MANAGEMENT :THE ACTIVITIES ASSOCIATED WITH

OPERATING A COMPANY, SUCH AS

CONTROLLING, LEADING, MONITORING,

ORGANIZING, AND PLANNING..

RISK MANAGEMENT CATEGORIES

STRATEGIC OPERATIONAL

FINANCIAL HUMAN CAPITAL

REGULATORY GOVERNANCE

IMPORTANCE OF PROACTIVELY

MANAGING RISKPROACTIVE

COSTEFFECTIVE

PROVEN RISK MANAGEMENT METHODOLOGY

GAIN ORMAINTAIN COMPETITIVE EDGE

FORWARD THINKING

RISK MANAGEMENT CAPABILITIES ARE CRUCIAL TO

LONG-TERM GROWTH AND FUTURE PROFITABILITY.

C-LEVEL RISK OVERSIGHT FUNCTIONS ARE BEING

ESTABLISHED, SUCH AS THE CHIEF RISK OFFICER.

INVESTMENTS IN RISK MANAGEMENT ARE EXPECTED

TO INCREASE IN THE NEXT TWO YEARS.

“WHAT IF?”

REACTIVE

EXPENSIVE

TICBOXAPPROACH

EVENTDRIVEN IMPLEMENTATIONS

LOSSOFCOMPETITIVENESS

LACKOFRISKMANAGEMENT TRAINING AND

UNDERSTANDING

INEFFECTIVECOMMUNICATION

“WHAT IF?”

VS.

DOW CHEMICAL

RISK MANAGEMENT GOALS & OBJECTIVES

• DEVELOP A COMMON UNDERSTANDING OF RISK ACROSS MULTIPLE

FUNCTIONS AND BUSINESS UNITS SO WE CAN MANAGE RISK COST-

EFFECTIVELYONANENTERPRISEWIDEBASIS.

• DEVELOPCONSISTENTANDCOMPREHENSIVEREPORTINGPROCEDURES.

• MONITORRISKANDCONTINGENCYRESOLUTION.

• PROVIDEFEEDBACKOFANALYSISANDMITIGATIONFORFUTURERISK

ASSESSMENTANDALLOCATION.

• ACHIEVE A BETTER UNDERSTANDING OF RISK FOR COMPETITIVE

ADVANTAGE.

• BUILDSAFEGUARDSAGAINSTEARNINGS-RELATEDSURPRISES.

• BUILD AND IMPROVE CAPABILITIES TO RESPOND EFFECTIVELY TO LOW

PROBABILITY,CRITICAL,CATASTROPHICRISKS.

• ACHIEVE COST SAVINGS THROUGH BETTER MANAGEMENT OF INTERNAL

RESOURCES.

• ALLOCATECAPITALMOREEFFICIENTLY.

DOW CHEMICAL

RISK ASSESSMENT PROCESS

Strategic risks taken on by an organization in the pursuit of

value:

• Market Shares

• Human Capital

Financial Risks associated with:

• Credit risks associated with the potential for not

receiving payments owed by debtors

• Risks associated with the long-term

sources of finance used.

Operational risks relative to an organization, that can be

controlled:

• Risk associated with design and pre-modification

• Changes in technology

• Accidents

Governance risks associated with:

• Improper Chemical Risk Assessment

• Inadequate Process Safety Management

• Law Suits

DO

W

CH

E

M

I

C

A

L

RI

S

K

S

FA

C

T

O

R

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STRATEGICAL MANAGEMENT FOR

EACH RISK FACTOR

• SCIENTIFIC ASSESSMENT

• CHEMICAL MANAGEMENT

• CONSIDER ALL PARTIES

• MAKING TIMELY DECISIONS

• PRODUCT SUBSTITUTION

• PREEMPTIVE ACTION

Monitor Risk Management Plan

WHY IS MONITORING IMPORTANT?

• TO EVALUATE

• TO MODIFY

• TO ENSURE THE ORGANIZATION IS

ACHIEVING ITS AIMS AND OBJECTIVES;

• TO ENSURE RESOURCES ARE USED

EFFICIENTLY TO ACHIEVE THE BEST

RESULTS OR EFFECTS;

• TO ENSURE COMPLIANCE LAWS, AND

WORKING WITHIN ITS POLICY FRAMEWORK.

MONITORING STRATEGY

THE DOW CHEMICAL RISK ASSESSMENT

COMMITTEE WILL:

• EFFECTIVELY COMMUNICATE THE IMPORTANCE OF

RISK MANAGEMENT TO STAFF

• SET-UP A SCHEDULE IN ORDER TO REVIEW THE

PROGRESS OF THE RISK MANAGEMENT STRATEGY

• STAY ABREAST OF TECHNOLOGICAL CHANGES OR

ADVANCES IN THE CHEMICAL INDUSTRY.

• ADHERE TO ALL GOVERNMENTAL AND

REGULATORY LAWS.

• ON-GOING TRAINING AND EDUCATION OF STAFF

REGARDING RISK MANAGEMENT

DOW CHEMICAL’S

SOCIAL IMPLICATIONS & RESPONSIBILITIES

Sustainability

Innovation for

Tomorrow

Partners for

Change

Responsible Operations

Smart Solutions

For Today

DOW CHEMICALSUSTAINABILITYMODEL

References

• Bureau Van DIJK. (2014). Retrieved from http://www.bvdinfo.com/industrynews/procurement-and-risk-management/-proactive-approach-the-key-to-strong-risk-management/801652148#sthash.GgaqdHQm.dpuf

• Dow Chemical. (2014). Retrieved from http://www.dow.com/sustainability/commit.htm

• Risk Management. (2008). Retrieved from http://https://riskanalyse.wordpress.com/tag/external-risk/