Internal governance and risk management

The system of internal governance is designed to ensure that the activities of the Aktia Group comply with the applicable regulatory requirements and the operational guidelines adopted by the Board of Directors.

Risk management refers to methods and procedures that systematically identify, analyse, mitigate and prevent various types of risk within the operations. As a crucial part of effective risk management, Aktia must have a sound and consistent risk culture to support the taking of sound and well-founded decisions.

Effective internal control is essential to ensure sound, responsible and well-managed operations. Internal control is an integral part of day-to-day operations and is based on clear roles, responsibilities and control mechanisms that help to manage risks, support reliable reporting and ensure compliance with internal and external requirements.

Aktia applies the “Three Lines of Defence” methodology to internal governance and risk management. Internal governance is thus implemented at all levels of the organisation.

First Line of Defence

The primary responsibility for internal governance and risk management lies with the business operations and its support functions, i.e. the first line of defence.

Second Line of Defence

The second line of defence, with a supporting control responsibility, consists of the independent Risk Control Function and Compliance Function. In addition, the Group's insurance company has an independent actuarial function and risk management function, and the fund company has a risk management function.

Third Line of Defence

The third line of defence, Internal Audit, is an independent function that is organisationally separate from other functions and provides the Board with objective assessments of the Group’s governance, risk management and internal control. The scope of the internal audit function covers the entire Group.

The control functions report to the Board of Directors of the relevant company.

The Board of Directors determines the Group’s guidelines, risk strategies and risk appetite, which form the basis of the Aktia Group’s risk management framework. The key risks in the Aktia Group are described here: Investors > Aktia as an investment > Risks.