The Audit and Risk Committee assists the Board of Directors in matters relating to financial reporting and control in accordance with the duties set forth in the Corporate Governance Code. In accordance with the committee charter, the committee monitors Fortum’s financial statements reporting process, the efficiency of the internal controls, and risk management systems and also monitors and assesses legal compliance and business ethics compliance. The committee approves the internal audit charter and the internal audit plan and its budget. The committee evaluates the independence of the external auditor, reviews the external auditor’s audit plan and meets with the auditor regularly to discuss the audit plan, audit reports and findings.
Pursuant to the Corporate Governance Code, the members of the Audit and Risk Committee shall have the qualifications necessary to perform the responsibilities of the committee, and at least one of the members shall have expertise specifically in accounting, bookkeeping or auditing. The members shall be independent of the company, and at least one member shall be independent of the company’s significant shareholders.
The external auditor, Chief Financial Officer, Vice President Internal Audit, Vice President Group Accounting, and Director Legal, Corporate, as secretary to the committee, attend the committee meetings on a regular basis. Other senior executives attend the meetings as invited by the committee.
The main duties of the Audit and Risk Committee include:
- monitoring Fortum’s financial position
- monitoring and assessing the financing reporting system
- monitoring the reporting processes of the financial statements and the sustainability reporting, and of other information subject to audit assurance
- monitoring the statutory audit of the financial statements and consolidated financial statements and of the assurance of the sustainability reporting, including identification of reported items and digital reporting
- informing the Board of:
- the outcome of the statutory audit and the assurance of sustainability reporting
- how statutory audit and assurance of sustainability reporting have contributed to the integrity of financial reporting
- what the role of the Audit and Risk Committee has been in the statutory audit and sustainability reporting assurance processes
- preparing the recommendation on the election of the auditor and of the sustainability reporting assurer
- monitoring and evaluating the independence of the statutory auditor and of the sustainability reporting assurer and, in particular, the offering of services other than auditing services by the auditor and the sustainability reporting assurer
- monitoring and assessing the efficiency of the internal control, internal audit, compliance and risk management systems
- reviewing the description of the main features of the internal control and risk management systems in relation to the financial reporting and sustainability reporting processes, which is included in the annual Corporate Governance Statement
- reviewing annually the Group risk policy
- monitoring material risks and uncertainties, including but not limited to climate, sustainability, financial, funding, IT security related risks as well as tax risks and principles approving the internal audit charter, the annual internal audit plan and the budget of the internal audit function and reviewing the internal audit reports
- monitoring and assessing the legal compliance and business ethics compliance
- establishing principles concerning the monitoring and assessment of related party transactions
- monitoring and assessing how agreements and other legal acts between the Company and its related parties meet the requirements of the ordinary course of business and arm’s length terms
Audit and Risk Committee in 2024
After the Annual General Meeting 2024, the Board of Directors elected from amongst its members Essimari Kairisto as Chair and Mikael Silvennoinen and Vesa-Pekka Takala as members of the Audit and Risk Committee. Until the Annual General Meeting 2024, the committee comprised Essimari Kairisto (Chair), Jonas Gustavsson, Maija Strandberg and Vesa-Pekka Takala. The members are all independent of the company and of its significant shareholders. In 2023, the Audit and Risk Committee convened 10 times and the attendance rate of the meetings was 98%.