Komplett Bank annual report 2019

is formulated in accordance with the statutory and regulatory requirements applicable to financial enterprises. Pursuant to Section 6-16(a) of the Public Limited Companies Act, the Board of Directors issues a statement concerning the setting of the salaries of the CEO and other senior executives. 10. Risk management and internal control Risk management and internal control form a key part of Komplett Bank’s strategy and business. The Bank has implemented guide- lines and procedures to ensure that risk management and internal control are appropriate and adequate given the level of risk and the scope of the business. Komplett Bank’s Board of Directors is responsible for ensuring that the Bank has a capital adequacy which is appropriate in accordance with the adopted risk profile and regulatory require- ments. Risk management and internal control also form a key part of the Bank’s assessment of the capital requirement in the short and longer term, where risks associated with the business and potential risks are included in the assessment. Risk management and internal control in the Bank must ensure attainment of the Bank’s strategic goals, while at the same time ensuring solid financial stability. This goal is achieved through: · A strong organisational culture characterised by a high level of risk awareness. · A good understanding of risks that generate revenue, including the ability to manage within the risk profile defined by the Board of Directors. · Striving for optimal capital utilisation within the adopted business strategy. · Avoiding unexpected events which could have a significant adverse impact on the Bank’s financial position. As Komplett Bank primarily secures earnings through credit expo- sure in the retail market for unsecured credit, it follows from the guidelines that Komplett Bank’s risk appetite regarding credit risk is higher than that regarding liquidity, market and operational risk. The Bank has a clear organisational structure with clearly defined roles and responsibilities for the Bank’s risk management and internal control, as described below. The company’s Board of Directors Komplett Bank’s Board of Directors is responsible for monitoring and managing the Bank’s overall risk and for regularly assessing whether the Bank’s governance and control arrangements are appropriate for the risk level and the scope of the business. The Board of Directors is also responsible for ensuring that the Bank’s capital adequacy is sufficient in light of applicable regulatory requirements and the risks associated with and the scope of the business that the Bank carries on. The Board of Directors also establishes overarching goals, guidelines and authorities for Komplett Bank’s management and control of risks, including the risk profile. The Board of Directors annually evaluates its work and competence linked to the Bank’s risk management and internal control. The Board of Directors also conducts an annual review of the Bank’s risk management and internal control, including matters which are reported or considered by the Board of Directors during the year. Audit and Risk Committee On 23 June 2018, the Board of Directors decided to set up an independent audit and risk committee consisting of two external Boardmembers, with the General Manager, Chief Finance Officers andManager Risk Control &Compliance participating from the senior management team. The committee conducts thorough evaluations of the Bank’s riskmanagement and internal control, as well as the Bank’s financial position, including financial reporting. The audit and risk committee is also responsible for ensuring that the Bank has an inde- pendent and effective external and internal audit, as well as satisfactory financial reporting in accordance with applicable laws and regulations. Remuneration Committee The remuneration committee is responsible for ensuring that Komplett Bank has appropriate guidelines and frameworks in place for its remuneration scheme. Komplett Bank’s remuneration scheme is intended to promote and provide incentives for good management and control of the company’s risk. The remuneration scheme must also be in accordance with the company’s overar- ching goals, risk tolerance and long-term interests. Chief Executive Officer The chief executive officer (CEO) is responsible for ensuring that the Board of Directors’ adopted objectives, frameworks, guidelines and authorities regarding the Bank’s risk management and internal con- trol are addressed and, as part of this, ensure that senior executives carry out and document the necessary internal control measures to identify, measure, follow up and manage risk and provide the Board of Directors with relevant and timely information that is of impor- tance to the Bank’s risk management and internal control. The CEO is also responsible for ensuring compliance with the Bank’s policies and guidelines, as well as the Board of Directors’ decisions. Management Team Department managers report to the CEO and are responsible for monitoring, controlling and reporting Komplett Bank’s compli- ance with both internal and statutory requirements within their respective areas of responsibility. The department managers are responsible for carrying out and documenting risk assessments within their own remit and for conducting an annual review of these and ensuring that the organisation and delegation of work within their department is appropriate, with the clear delegation of control tasks and responsibilities. Komplett Bank Annual Report 2019 15