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Essity’s Board determines the Group’s strategic direction based on recommendations from Executive Management Team. The responsibility for long-term and overall management of strategic risks follows the company’s delegation scheme, from the Board to the President, and from the President to the Business and Global Unit Presidents.
This implies that most operational risks are managed by Essity’s business and global units at a local level, but are coordinated when deemed necessary. The tools for this work primarily comprise continuous reporting by the business and global units and the annual strategy process, which includes risk assessment and risk management as part of the process. In this process, identified risks have been classified according to the likelihood of the risk becoming a reality and the impact on Essity’s goal fulfillment. The outcome of this evaluation constitutes a part of the assessment of risks described in this section.
Essity’s financial risk management is centralized, as is the case for the corporate internal bank for financial transactions of Group companies and management of the Group’s energy risks. The financial risks are managed in accordance with the Group’s finance policy, which is set by Essity’s Board and, together with Essity’s energy risk policy, comprises a framework for management activities. The risks are grouped and followed up on a regular basis to ensure compliance with these guidelines. Essity has also centralized the management of other risks.
Essity has established a corporate internal audit unit, which ensures that Essity’s organization complies with the set policies.