Approach to management


The LOTOS Group has an Enterprise Risk Management (ERM) system in place, which provides the framework for our internal procedures and regulations. By implementing the ERM system, we can ensure that the impact of potential threats to achieving our business and operational objectives is being minimized and that we can effectively take advantage of newly emerging opportunities and business possibilities identified in our environment.

ERM document hierarchy at the LOTOS Group

ERM document hierarchy

The Enterprise Risk Management system is applicable to all LOTOS Group employees. Every employee can report new risks and every individual risk is managed by a risk owner. The Enterprise Risk Management Committee formulates recommendations on risk management and monitors the execution of mitigation measures. The Board of Grupa LOTOS takes key decisions regarding the ERM system and approves Risk Maps. Risk management is coordinated at all stages, from identification and assessment to response planning and execution, and finally, monitoring and reporting.

Hierarchy of responsibility for enterprise risk management at the LOTOS Group

Hierarchy of responsibility for enterprise risk management

We evaluate our ERM system’s effectiveness every year, as part of our organizational maturity assessment, the conclusions and recommendations of which are used to further improve the system. 
A final assessment score, expressed as a percentage, reflects:

  • the degree to which the system implemented in the Company complies with best practices, 
  • the degree of its implementation.
ERM score as part of the annual organizational maturity assessment
Year Planned score [%] Compliance with planned score [%] Total score [%] *
2011 97 93 90
2012 96 97 93
2013 96 97 93

* The total is the product of the planned score and the compliance score.

Information on the operation of the Enterprise Risk Management System is regularly provided to the Board of Grupa LOTOS and the Audit Committee of the Company's Supervisory Board.