SanomaWSOY’s Board of Directors has approved the Group’s risk management policy. In addition to this, other risk management tools include the Group’s, divisions’ and business units’ policies and guidelines.
The Board of Directors is responsible for monitoring the Group’s asset management. The President & COO is responsible for arranging the appropriate accounting and control mechanisms. The Group’s financial performance is monitored on a monthly basis using a group-wide operational planning and reporting system. The system includes data on the actual income statement, balance sheet figures and main key figures, up-to-date estimates for the current year, and rolling estimates for the next 12 months.
The Board of Directors selects an Audit Committee from among its members annually. The Audit Committee prepares, steers and evaluates the Group’s risk management, internal control procedures, financial reporting, auditing and internal auditing in accordance with the policy confirmed by the Board of Directors.
At the end of 2003, the members of SanomaWSOY’s four-person Audit Committee were independent in the manner stipulated in the new principles of corporate governance issued by the Helsinki Exchanges, with the exception of Robin Langenskiöld. All Board members are entitled to attend the meetings of the Committee. Depending on the issue it is addressing, the Audit Committee invites experts to attend its meetings, such as President & COO, Senior Vice President, Finance and Administration, Internal Audit Director, or the auditors.
SanomaWSOY’s internal auditing is handled by the Group’s Internal Auditing Department. Internal Auditing is carried out in collaboration with SanomaWSOY’s Management Group, the Audit Committee, and the Group’s auditors in accordance with the Group’s corporate governance principles and the policy for internal auditing given by the Audit Committee.
Authority issues regarding approval of investments and HR related matters have been clearly defined in SanomaWSOY’s corporate governance principles. Investments are considered as part of the review of strategies, action plans and budgets carried out by various administrative bodies across the Group. All investment decisions are taken on the basis of a separate investment proposal, in accordance with the authority to approve investments. For decision-making and monitoring purposes, an investment proposal, which covers the bases for the investment, including financial calculations, is made for all major investments.
SanomaWSOY’s business risks are first and foremost related to the operating environment. About one-fifth of the Group’s net sales are derived from media advertising, which reacts quickly to changes in GDP. New products, acquisitions and product development involve more risks than normal business. The geographic distribution of risks varies according to division.
Financial risk management is described in more detail in the Financials.
SanomaWSOY’s most important intellectual property rights in respect of the Group’s products and services are copyrights, publishing rights, trademarks, business names, domains, and know-how possessed or licensed by the Group. Intellectual property rights are an essential part of the Group’s identifiable intellectual capital, and the principles regarding their management have been approved by SanomaWSOY’s Management Group.
The Group aims to gain competitive advantage by acquiring intellectual property rights as cost-effectively as possible.