Risks and Risk Management
Risk management is part of the Board’s and management’s governance and follow-up of the business. At Investor, risk management is an integral part of the Group’s processes, meaning that control and responsibility for control is close to the business operations. Investor’s Board decides on risk levels, mandates and limits for the Investing activities and Investor’s different operations, while the Boards of the operating subsidiaries decide on policies that have been adapted to manage the risks in their respective businesses.
In its business, the Investor group is exposed to commercial risks, financial risks including market risks such as share price risk, liquidity and financing risks, credit risks. Investor is also exposed to operational, political, legal and regulatory risks. Investor’s most significant risk is share price risk.
Investor’s Risk policy sets measurement and mandates for market risks for the short-term trading, excess liquidity and financing activities. The policy also outlines principles for foreign exchange risk management in connection with investments and cash flows in foreign currency, measurements and limits for credit risks and principles to minimize legal, regulatory and operational risks in the business.
Identifying and evaluating risks that could prevent the company from achieving its business goals and having reliable financial reporting, is conducted continuously in the day to day business at Investor. The Board follows up frequently on limits and risk exposure to ensure the ability to reach business strategies and goals.
Risk assessment is carried out yearly in the form of a self-evaluation and includes the establishment of action plans to mitigate identified risks. Risk assessment encompasses the entire organization and all of its processes. It takes into consideration such things as systems, control activities and key individuals.
The identified risks are compiled in a company-wide risk map. Conclusions drawn from the risk assessments are reported to the Management Group and to the Board. The CEO and Management Group follow up on the implementation of action plans and report back to the Board.