The goal of risk management is to support the achievement of the TVO Group's strategy and business objectives, and to retain the prerequisites for operation. Risk management is carried out in accordance with the risk management principles, approved by the Board of Directors, which define the purpose and objectives of risk management. The definition of risk is “the effect of an uncertainty on the organization’s goals”.
Risk management is monitored by the company’s Board of Directors. The President and CEO carries the responsibility for the company’s risk management and its organization, and regularly provides reports on key risks and the status of risk management to the Board. Board members are responsible for risk management within their areas of responsibility, and provide risk reports to the President and CEO. The Risk Management Team is a team working under the Group Management Team. It assesses risk management actions by the units and verifies that risks are properly addressed within the Group.
Competence center coordinates risk management
The Funding and Risk Management competence center prepares standardized, clear risk management procedures and guidelines, as well as provides the risk management tools the Group companies need. The competence center supports and challenges the business units and corporate services in risk management, and provides guidance for the units in independent identification, analysis, and processing of risks, as well as in reporting. The competence center coordinates the reporting of risks at the Group level.
The overall risk survey of the TVO Group is updated twice a year and then reported to the Management Team of the Group as well as to the Board’s Audit and Finance Committee and the Board. Quarterly reports on the most significant risk management measures implemented by the Group are submitted to the Management Team and the Board. The Group’s key risks are described in the Report of the Board of Directors.
Principle of continuous improvement
Risk management is developed in accordance with the principle of continuous improvement, aiming at optimized and continuously developed risk management. The risk management process is annually assessed with a risk management level assessment procedure. The Risk Management Team processes the assessment results and determines goals for the development of risk management based on the results.
In 2021, TVO’s management and operational planning process continued to increase the level and effectiveness of risk management. Risk management is a part of the Group’s strategy process and, as such, it is being developed to help meet the Group’s objectives with an acceptable risk level.