Citycon's Risk Management Process
Citycon's risk management is based on a holistic risk management programme (Enterprise Risk Management, ERM), which was fully adopted by the company during 2007. In Citycon, ERM includes the following three defined ERM processes:
- Risk management in the main business processes
- Risk reporting
- Continuous development and monitoring of risk management
Risk management in the main business processes
Within the framework of its ERM project, Citycon defined its five key business processes as shopping-centre management, property acquisitions, takeovers, property development as well as financial control and reporting. These processes were initially analysed from the risk management perspective and a target status, at which the Group's units aim, was defined for each process in accordance with risk management requirements.
At the core of Citycon's ERM and risk reporting lies a Group wide risk register containing each unit's objectives, risks and risk management measures. As part of annual and strategic planning, units define their objectives for the planning period, identify the related risks, analyse their importance and the probability of their realisation and record the related risk management measures and responsibilities in the common register. Based on the recorded information, a risk report covering the business units and the Group is generated for the top management and the Board of Directors. The risk register is also used for monitoring the progress made with regard to risk management measures. While each business unit identifies its own risks, other Group functions conduct additional risk identification.
Continuous development and monitoring of risk management
Citycon aims at the continuous evaluation and development of its ERM process and general risk management. A Risk Management Steering Group convening four times a year is in charge of approving risk reports, assessing the sufficiency of risk management measures in relation to identified risks, monitoring the development of risk management measures and evaluating the sufficiency of Citycon's risk management.