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Risk management helps
to avoid the rocks
to be prepared
for the most
likely risk scenarios, and also to
foresee consequences of some
less likely ones, Edita uses a risk-
management model.
Bertil
Sjöberg
, Finance Director at
Edita Sweden, says effective risk
management helps the Group
to avoid risks, and – to this end
– the management team of each
company prepares a risk matrix
on a quarterly basis. Minor issues
are handled within the company,
and more serious risks are fol-
lowed up on a Group level.
“Our method gives us a
common platform, from which
we communicate risks and plan
for needed actions,” Sjöberg
says. “This also helps us to show
our owners and other stake-
holders that our risk-manage-
ment is sound.”
All risks are categorized
as External Business Drivers,
Markets/Customers, Human
Resources or Business-
Processes/Products/Services.
They are also assessed based
on probability and financial con-
sequences. Conceivable risks
include losing a customer, not
achieving the budgeted revenue,
losing key employees or reduced
volumes in a specific segment.
“A recession is always a great
challenge, and in 2011 the eco-
nomic uncertainty was the most
serious individual risk,” Sjöberg
says. “But there is not much we
can do about the actual reces-
sion. For those kinds of risks it
is more about being prepared
with an action plan. The cus-
tomers decide how much they
spend and we have to adapt to
the situation. However, for other
types of risk, we aim to offset or
eliminate the risk with certain
actions.”
He stresses that risk man-
agement differs from company
to company depending on the
firm’s size and the industry it
operates in. “Smaller companies
are more vulnerable to losing
key employees, and the printing
companies face more physical
risks,” Sjöberg says. “If there is a
fire in a printing house, it takes
a long time for business to start
up again.”
Every Edita Group company
tries to do its bit to reduce the
number of risks that need to be
discussed on a Group level. “The
financial aspect is most impor-
tant, but this is not an exact sci-
ence,” Sjöberg says. “Risk man-
agement is rather a matter of
judgment, which is converted
into figures to simplify the inter-
nal communication and to prior-
itize actions.”
•
Bertil Sjöberg
Kati Niemelä
Right indicators
guide us well
for edita,
financial responsi-
bility means long-term work to
secure profitability and solvency.
We must ensure that business
operations comply with the
Group Strategy, and that we
focus on the right things. One
of the essential monitoring tool
is key performance indicators
(kpis). “The selection of just the
right financial indicators is cru-
cial, as they should guide the
business operations in the right
direction,” says
Kati Niemelä
,
cfo at Edita Plc.
“We started updating the
financial indicators last year, with
the aim of finding strategically
essential indicators for the entire
Group and each business area
during 2012. Finding indicators
is not a problem. Instead, the
challenge lies in defining those
two or three key indicators that
guide our operations in the best
possible manner.”
Edita’s financial indicators
form a hierarchical tree. The
top levels are the stra-
tegic indicators for the
entire Group and
for different busi-
ness areas. From
these, sub-
indicators are
derived for
various levels of
the organiza-
tion. “All indi-
cators should
guide operations in a single
direction indicated by the strat-
egy. The essential thing is to cas-
cade the indicators throughout
the levels of the organization,”
Niemelä says.
In addition, Edita and its
Group companies have several
other indicators. The intention is
not so much to guide operations
as to provide status informa-
tion and alerts when actions are
needed. “In connection with our
annual strategy update, we also
verify whether the indicators we
use are guiding our operations
as they should,” Niemelä says. “It
is important to assess the indica-
tors regularly, even if no changes
were needed.”
•
edita’s year 2011
47