Internal control and risk management
The aim of CapMan’s internal control and risk management is to ensure that the company’s business complies with regulation, and that risks associated with the company’s business and objectives are identified, and appropriately monitored and managed. The Group’s internal control system comprises of risk management and compliance functions, both of which shall act in accordance with action plans that are annually ratified by the Board of Directors and shall report about their activities and observations to the operational management and Board of Directors. Taking into account the nature and extent of the company’s business, CapMan has not considered necessary to set up a separate internal audit function within the Group. An external service provider acts as an internal auditor to operations subject to authorisation granted by the Financial Supervisory Authority.
Roles and responsibilities
The Board has the responsibility for determining the company’s risk appetite as part of defining its strategic goals and for ensuring that the risk management and internal control are appropriately organized. The Board has established an audit committee consisting of Board members the purpose of which is to concentrate more closely on monitoring the risk management and internal control processes. The Board approves annually the action plans of the risk management and compliance functions.
The Management Group is responsible for the implementation of the internal control and risk management processes, for ensuring their operational effectiveness and allocation of adequate resources. The Management Group also defines and monitors the main risks of the business and other functions and prepares an action plan for the most relevant identified risks.
The Group’s CFO, who is also member of the Management Group, coordinates the arrangement and development of internal audit and risk management and, when necessary, reports to the Board on the operation of and observations on risk management and internal control.
The Group has a compliance officer, whose main task is to ensure that laws, regulation, and orders of authorities are complied within the Group’s business and operations.
The organisation of the risk management and internal control of the alternative investment fund manager’s (AIFM) regulated operation are the responsibility of CapMan AIFM Ltd’s Board of Directors. In particular, the Board ensures that the control functions are independent from the business operations. The regulated operation has a dedicated independent Risk Manager responsible for the risk management of the day-to-day operation through monitoring that risk management policies and procedures approved by the Board are followed and that they are appropriate and effective at the level of both the manager and the funds under its management. The Risk Manager reports on his observations to the AIFM’s Board regularly.
The compliance function of the regulated operation is conducted by the Group’s compliance officer.
Risk Management process
Risk management at CapMan is a systematic and continuous activity, which identifies, assesses and controls the risks affecting the Company by reducing, avoiding or transferring the adverse economic or other consequences of the risks. Risk management is a part of the Company’s strategy process, operative planning and daily decision-making.
Risk management is a tool for the Board of Directors and corporate management to systematically examine and anticipate threats, possible losses and any positive aspects that might result. It is also a tool to evaluate and manage both short-term and long-term risks in a holistic way that supports the achievement of Company’s strategic objectives.
In CapMan Plc, the risk management process is aligned with strategy and business planning processes, as presented in the below figure:
More information on CapMan’s risk management and internal control as well as risks relevant to CapMan’s business can be found in the Annual Report, in particular in the Board of Directors’ Report, in the corporate governance statement and in the appendices to the annual accounts.