_62 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 2 RISK MANAGEMENT Risk factors specific to Michelin, description and related management systems ● intellectual property is protected through our policy of obtaining patents wherever this is possible or desirable based on a broad vision of the secrets to be protected. Operating markets are monitored to ensure that our intellectual property rights are not infringed; ● sensitive information, tangible assets and intangible assets are also protected by physical security systems; ● every employee is a protection enabler, with a deeply instilled security culture informed by the Group Security Charter; ● experts within the Group who have the skills that are critical for our operations are identified and afforded the recognition needed to retain their talent. Impact 12 – Product safety Tires are still Michelin's traditional core business, in which it holds robust leadership positions around the world and across its three operating segments: automotive, road transportation and specialty markets. Like all tiremakers, if defects appear in its products during their use or if they fail to comply with the applicable regulations, the Group could be faced with liability claims or be required to recall the products. This impact therefore entails material, reputational and financial risks for the Group. Specific nature of the impact Michelin’s focus on customer needs and the quality of its products and services has built confidence in the MICHELIN brand and contributed to the Group’s performance. Updated in 2021, the Quality Statement emphasizes that “Quality remains critical to the safety of our products and services and to their compliance with applicable requirements.” Thanks to a very robust process for tracking product performance in every market, Michelin has always been able to quickly and proactively issue recalls in response to any risks that could potentially impact the safety of its customers. This is also one of the promises made in the Group's Quality Policy. Governance and impact management response Product performance impact is governed by the Product Performance Monitoring Board, chaired by the Corporate Internal Audit, Risk Management, Internal Control and Quality Director. All Group employees, at all points in the value chain, are involved in managing these impacts. ● Product design and development projects are managed in accordance with detailed project management procedures. Products and services are described in specifications that cover customer requirements and expressed needs, the potential impact of the particular or extreme conditions of use in a given region and all of the applicable standards and regulations. The Research, Development, Process Engineering and Quality functions are responsible for performing robust simulations and tests on new products to ensure that they comply fully with the design specifications. ● The entire production process is subject to quality assurance procedures designed to guarantee that the products comply with Michelin’s safety and performance standards. ● A product/service performance monitoring process based on the customer experience and customer satisfaction surveys ensures that no signs of a problem go undetected, however weak they may be. This process now uses artificial intelligence, forecasting and alert systems to minimize the time needed to detect a potential problem. The current processes have been certified by independent organizations. The Group has taken out specific insurance cover against the risk of product recalls and liability claims. The Group's insurance program is described in section 2.2.5.
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