RISK MANAGEMENT STATEMENT
Effective risk management is not just a priority but a fundamental value at Quanex Building Products. Priorities change, but values never do. Our primary tool for managing risk is a robust enterprise risk management (ERM) process. Our ERM process is critical to identifying and managing risks that are key to our strategic success. The ERM program is sponsored by our Senior VP & Chief Financial Officer, with daily administration overseen by our Senior Insurance and Risk Manager. The ERM Committee comprises representatives from each of our business units, domestic and international, as well as corporate strategy council members. These representatives meet at least quarterly to review and rank risks and evaluate progress on mitigation plans. Mitigation plans are owned by respective members of our strategy council, and progress is overseen by the ERM committees, the Quanex Executive team and, ultimately, the Board of Directors. On an annual basis, the Board of Directors reviews the top enterprise risks to the organization and the status of the ERM process in general.
Complementing our ERM system are divisional ERM teams that support division-level oversight and mitigation of specific risks relating to safety, insurance, cybersecurity, among others. One of the proven tools of the ERM program is our Crisis Management Plan. Each location has its own Crisis Management Plan that is tested through tabletop drills and updated as needed. Each plan is tailored to the location’s specific operation. These plans help to ensure that Quanex has the right protection against potential disruptive events on a plant-by-plant basis. They are designed not only to keep our employees safe, but also to minimize potential losses from business interruption and to ensure an ongoing supply of products to our customers even following a catastrophic event.
Beginning in 2023, we are integrating climate-related risks and opportunities within our ERM process. Since members of the Corporate Sustainability Team are also members of the ERM committees, this is a natural transition and will ensure that climate-change risks and opportunities receive due consideration going forward.