In 2008, we have made significant progress in how we approach risk management. The underlying management of risk has always been managed locally within individual businesses to a high standard. This has now been augmented by improvements in risk awareness, the introduction of a common risk language, and the introduction of a new risk report, a risk management and governance framework. The appointment of a dedicated Head of Risk Management Coordination and Governance and the recent formation of a Risk Oversight Group also show our commitment to establishing a robust process to identify and manage operational and financial risks, as well as non-financial risks.

We also held four half-day workshops in April and May 2009, each themed around the concept of Corporate Responsibility and the Changing Energy strategy, focused on identifying risks facing E.ON. The purpose of these workshops was to take a first step in better understanding and identifying non-financial risks. Its aim was that this may begin to explicitly draw out the key issues to consider as an additional input to the overarching E.ON risk management process.

It also supports recommendations made by The Re-assurance Network – that “work is continued so that significant risks relating to non-financial areas (eg goodwill, reputation and relationships with stakeholders) are effectively identified, assessed, coordinated and managed as an integral element of governance.” Finally, this also contributed to broaden colleagues’ concept of risk management and increase awareness of Corporate Responsibility across E.ON operating businesses.

Thirty-five middle/senior managers from across our operating businesses and our head office were involved in the process.

On completion of the workshops, the initial findings were compiled and evaluated using our recently developed Consolidated Risk Assessment Matrix to begin the process of risk prioritisation.

Any risks which are not on the existing register will also be subject to formal assessment by our individual businesses through the risk management and governance framework.