While executing its strategy and reaching for agreed business objectives, Sanoma and its businesses encounter numerous risks and opportunities. Managing business them is one of the daily responsibilities of Sanoma’s management.
Risk management policy and process
Sanoma’s Risk Management Policy describes the scope, objectives, processes as well as roles and responsibilities of various corporate bodies in the overall corporate risk management.
- The Board of Directors is responsible for approving Sanoma’s Risk Management Policy and for overseeing the effectiveness of risk management.
- The Audit Committee regularly reviews and monitors the implementation of the Risk Management Policy and risk management process.
- The President and CEO, with the support of the Executive Management Group, is responsible for defining risk management strategies and procedures, and for setting risk management priorities. The President and CEO is also responsible for defining changes in the risk reporting process, in the Sanoma common risk language and in the applied risk model.
- The Audit and Assurance function coordinates the Group risk management process and produces periodical risk reports for the President and CEO and the Executive Management Group. Updated Group risk assessment results with related ongoing or planned mitigation actions are communicated to the Audit Committee and further to the Board of Directors at least twice a year.
The Group’s risk management process is integrated into the systems for strategic planning, management monitoring and quarterly reporting. Strategic Business Units (‘SBU’) identify, assess, manage and monitor risks related to achieving the objectives in their operations.
More information on identified key risks and risk management is available in the Financial Statements 2017.
Identified key risks
General business risks associated with media and learning industries relate to developments in media advertising, consumer spending, and public and private education spend. The general economic conditions in Sanoma’s operating countries and the overall industry trends could influence Sanoma’s business activities and operational performance. The volume of media advertising in specific is sensitive to overall economic development and consumer confidence.
In 2017, 30% of Sanoma’s net sales was derived from media advertising, 33% from single copy or subscription sales, and 22% from learning business.
In Sanoma’s risk model, the Company specific risks are divided into four main categories: strategic, operational, financial, and hazard risks. The most significant risks that could have a negative impact on Sanoma’s business activities, operational performance, or financial status if realised, are illustrated below by category.
Key risks per category
Latest review of significant near-term risks and uncertainties is available in Q1 2018 Interim Report p. 14.