Governance Information • Apr 4, 2023
Governance Information
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Board-appointed committees
Corporate Governance Statement
Board-appointed committees
| Corporate Governance Statement | 3 |
|---|---|
| Governance Steering System |
4 |
Sampo plc's articles of association |
4 |
| Other normative framework | 4 |
| General meeting | 5 |
Annual General Meeting |
5 |
| Extraordinary General Meeting | 6 |
Attending a shareholders' meeting |
6 |
| Shares and shareholders | 6 |
| Board of Directors 7 |
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| Board of Directors' duties 7 |
Election and terms of office of Board members 8 |
| Shares and share-based rights held by the Board members 12 |
| Board-appointed committees 13 |
| Audit Committee 13 |
Nomination and Remuneration Committee 14 |
| Group CEO 15 |
| Sampo Group Executive Committee 16 |
| Shares and share-based rights held by the Group CEO and the members of the Executive Committee 19 |
Board of Directors
| 21 |
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| 21 |
| 21 |
| 22 |
| 23 |
| 23 |
| 26 |
| 28 |
| 29 |
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REPORTS FOR THE YEAR 2022 WWW.SAMPO.COM/YEAR2022
Sampo Group
Sampo plc complies with applicable legislation as well as the rules of the Helsinki stock exchange and, as of 22 November 2022 following the commencement of trading in Sampo Swedish Depositary Receipts on Nasdaq Stockholm, the rules of the Stockholm stock exchange. In addition, Sampo plc complies, in full, with the Finnish Corporate Governance Code 2020 issued by the Securities Market Association on 19 September 2019, which became effective from 1 January 2020 (the "CG Code").1 The CG Code can be viewed in full on the website of the Finnish Securities Market Association at www.cgfinland.fi.
This Corporate Governance Statement, as provided by Chapter 7 Section 7 of the Finnish Securities Market Act (746/2012), has been prepared in accordance with the CG Code. This statement is presented – as permitted by the Finnish Securities Market Act and as recommended by the Finnish Securities Market Association – as a separate report from the Board of Directors' Report.
1 Sampo plc complies with the CG Code of its domicile and therefore deviates in certain aspects from the Swedish Corporate Governance Code (Svensk kod för bolagsstyrning, the "Swedish Code"). Applying the Swedish Code could lead to contradictions due to differences between Finnish and Swedish legislation, corporate governance codes and corporate governance practices. The main deviations from the Swedish Code relate to not having a nomination committee comprised of members appointed by the company's owners and to the handling of certain tasks which under the Swedish Code would belong to the nomination committee. The Swedish Code issued by the Swedish Corporate Governance Board (Kollegiet för svensk bolagsstyrning) is available at www.corporategovernanceboard.se.
The Finnish Companies Act requires that every Finnish limited liability company has its own articles of association. Sampo plc's articles of association define, among other things, the business area of the company and the scopes of competences and general principles of division of powers between key governing bodies (i.e., General Meeting, Board of Directors and Managing Director).
Sampo Group's general governance is built on an operational model where Sampo plc, as the parent company of the Group, provides Group companies with a framework of general principles within which the parent company expects the Group companies to organise and carry out their businesses. These principles are manifested in Sampo Group's Code of Conduct, Risk Management Principles, Remuneration Principles and Compliance Principles, which form the core of Sampo Group's internal governance framework.
On the basis of and in compliance with the groupwide framework, each Group company defines and implements a company specific governance and risk management framework (including e.g. capitalisation targets, profit targets, authorisations with risk limits, remuneration policies and other guidelines and instructions), which steers, limits and controls all operations, especially risk taking.
Sampo Group
Laws, regulations, authority recommendations, industry standards, etc.
Principles: Code of Conduct, Risk Management Principles, Remuneration Principles, and Compliance Principles.
Other guidelines: Internal Control Policy, Information Security Principles, Guidelines for Insiders, Data Privacy Statement, Guideline for Required Internal Procedures to Prevent Money Laundering and Terrorist Financing, Disclosure and Communication Policy, etc.
E.g. risk management policies, investment policies, underwriting policies, remuneration policies, internal audit and control policies, compliance policies, HR policies, information security and data privacy policies, antimoney laundering/corruption/bribery/ conflicts of interests policies, codes of conduct, environmental policies.
The general meeting is the highest decision-making body of Sampo plc, where the shareholders participate in the supervision and control of the company by using their right to speak and vote.
The Finnish Companies Act and Sampo plc's articles of association determine the issues that have to be dealt with at a general meeting (competence of a general meeting).
Customarily, a general meeting deals with, in addition to issues determined by law and the articles of association, the issues presented by the Board of Directors. Furthermore, according to the Finnish Companies Act, a shareholder has the right to require a certain issue to be dealt with at a general meeting, providing the issue falls within the scope of competence of a general meeting.
The Board of Directors convenes a general meeting by publishing a notice of the meeting on Sampo plc's website at least three weeks before the general meeting and no later than nine days before the record date of the general meeting. The notice of a general meeting shall also be published by a stock exchange release.
The Annual General Meeting (the "AGM") must be held within six months of the end of the financial year on a date specified by the Board of Directors. The AGM shall discuss matters assigned to it in accordance with the articles of association and any other business referred to in the notice of the meeting.
The notice and other documents of the AGM, including the proposals of the Board of Directors and its Committees, as well as the Financial Statements, the Board of Directors' Report and the Remuneration Report for Governing Bodies, will be made available on Sampo plc's website at least three weeks before the AGM.
In 2022, Sampo plc's AGM was held on 18 May. In the AGM of 2022, the total number of represented shareholders was 2,851 representing 61.01 per cent of the votes of all Sampo plc's shares. Due to the COVID-19 pandemic, the AGM 2022 was held based on the temporary legislation approved by the Parliament of Finland on 7 May 2021. The shareholders of the company were able to participate in the meeting and exercise their shareholder rights only by voting in advance or by way of proxy representation and by presenting counterproposals and asking questions in advance.
An Extraordinary General Meeting (the "EGM") is convened when considered necessary by the Board of Directors. The Auditor, or shareholder(s) together holding a minimum of one tenth of all the shares in the company may request in writing that an EGM shall be convened to discuss a specified matter raised by them.
By attending shareholders' meetings shareholders may, either personally or through representatives, exercise their voting rights, request information and participate in the decision-making process of Sampo plc.
At a shareholders' meeting, each Sampo plc A share carries one vote, while each Sampo plc B share carries five votes.
As of 31 December 2022, the total number of Sampo plc's shares, including both 516,379,512 A shares and 200,000 B shares, equalled to 516,579,512 shares. Each A share entitles its holder to one vote and each B share to five votes at a shareholders' meeting. The total number of votes attached to the shares was 517,379,512.
Each B share can be converted into an A share at the written request of the holder of the B share or, with respect to nominee-registered shares, at the request of the nominee under whose name the shares are registered in the Shareholders' Register. Any decisions on conversion and related details shall be made by the Board of Directors or the Board's authorised representative. In June 2022, at the request of the holder of the B shares, a total of 1,000,000 B shares were converted into 1,000,000 A shares by resolution of the Board of Directors of Sampo plc.
As of 31 December 2022, a total number of 198,131 Finnish registered shareholders held 199,128,630 shares representing 38.55 per cent of all shares. In addition, 12 nominee registers held 317,450,882 shares representing 61.45 per cent of all shares.
Sampo plc's Board of Directors, elected annually by the AGM, uses the highest decision-making power in Sampo Group between the AGMs. Sampo plc's Board of Directors is responsible for the management of the company in compliance with the law, authority regulations, Sampo plc's articles of association and the decisions of the shareholders' meetings.
The working principles and main duties of the Board of Directors have been defined in the Board's Charter. To ensure the proper running of operations, Sampo plc's Board of Directors has approved internal rules concerning general corporate governance, risk management, remuneration, compliance, internal control and reporting in Sampo Group.
Group level remuneration matters.
X Prepares
According to Sampo plc's articles of association, the company's Board of Directors comprises no fewer than three and no more than ten members elected by shareholders at the AGM. The term of office of the Board members ends at the close of the next AGM following their election. The members of the Board elect a chair and vice chair from among its members at their first Board meeting following the AGM.
According to Sampo plc's Board Diversity Policy, when electing the Board of Directors, the aim is to ensure that the Board as a whole for the purpose of its work possesses the requisite knowledge of and expertise in the social, business and cultural conditions of the regions and markets in which the main activities of the Group are carried out. A broad set of qualities and competences is
sought for and it is recognised that diversity, including age, gender, geographical provenance, as well as educational and professional background, is an important factor to take into consideration. According to the Board Diversity Policy, and in compliance with the CG Code, it is also important that the person to be elected to the Board shall have the qualifications required for the duties and the possibility to devote a sufficient amount of time to the work.
The number of the Directors and the composition of the Board shall be such that they enable the Board of Directors to see to its duties efficiently. Both genders shall be represented in the Board of Directors and the target is a share of at least 37.5 per cent of the total number of members for both genders.
As proposed by the Nomination and Remuneration Committee, the AGM of 2022 decided that the Board would consist of nine members until the close of the AGM to be held in 2023. The increase of the number of Board members was based on a need, assessed by the Board's Nomination and Remuneration Committee, to emphasise knowledge of the Property & Casualty market and the UK's geographical market due to the strategic development of Sampo Group. As a consequence of the increase of number of Board members, the composition of the Board of Directors does not in its current form temporarily fulfil the target of a share of at least 37.5 per cent of the total number of members for both genders. However, the Board remains committed to reaching its target of having both genders represented in the Board and the Nomination and Remuneration Committee will continue its endeavours to reach the target when proposing candidates for Board membership next time.
The following persons served on Sampo plc's Board of Directors in 2022:
Björn Wahlroos Chair of the Board Born 1952, Ph.D. (Econ.)
UPM-Kymmene Corporation, Chair of the Board The Mannerheim Foundation, Board Member Finnish Business and Policy Forum EVA, Board Member The Research Institute of the Finnish Economy ETLA, Board Member Several other charitable institutions
Member of the Board of Directors of Sampo plc since 5 April 2001 and Chair of the Board since 7 April 2009.
Vice Chair of the Board Managing Director, Signe and Ane Gyllenberg Foundation Born 1961, M.Sc. (Econ.)
Association of Finnish Foundations, Chair of the Board Solidium Oy, Board Member Kesko Corporation, Board Member Swedish Society of Literature in Finland, Board Member Kelonia (Private Equity holding company), Board Member
Member of the Board of Directors of Sampo plc since 18 April 2013 and Vice Chair of the Board since 9 April 2019.
Member of the Board Chair for the Nordics, BlackRock Born 1955, M.Sc. (Econ.), MBA
Green Hydrogen Systems A/S, Chair of the Board BlackRock Group Ltd, Board Member BW Group, Board Member
Member of the Board of Directors of Sampo plc since 21 April 2016.
Information as on 31 December 2022. The CVs of members of the Board of Directors can be viewed on the Internet at www.sampo.com/board.
Fiona Clutterbuck Member of the Board Born 1958, LLB (Hons)
M&G plc (FTSE 100 company), Senior Independent Director, Member of the Audit, Risk, Remuneration and Nomination Committees
Member of the Board of Directors of Sampo plc since 9 April 2019.
Georg Ehrnrooth Member of the Board Born 1966, Studies in agriculture and forestry
eQ Oyj, Vice Chair of the Board Geveles Ab, Chair of the Board Fennogens Investments S.A, Board Member Topsin Investments S.A., Board Member Neptunia Invest AB, Board Member Louise and Göran Ehrnrooth Foundation, Chair of the Board
Anders Wall Foundation, Board Member Paavo Nurmi Foundation, Board Member
Member of the Board of Directors of Sampo plc since 2 June 2020.
Johanna Lamminen
Member of the Board Born 1966, D.Sc. (Tech.), MBA
Pohjan Voima Ltd, Board Member Cargotec Corporation, Board Member Finnish Foundation for Technology Promotion, Chair of the Board
Research Institute of the Finnish Economy ETLA, Board Member
Finnish Business and Policy Forum EVA, Board Member
CellMark AB, Board Member and Member of the Audit Committee
Savonlinna Opera Festival, Chair of the Board
Member of the Board of Directors of Sampo plc since 9 April 2019.
Information as on 31 December 2022. The CVs of members of the Board of Directors can be viewed on the Internet at www.sampo.com/board.
Steve Langan Member of the Board Born 1960, Master of Arts, Medieval and Economic History
Hepworth Wakefield, Chair of the Board
Member of the Board of Directors of Sampo plc since 18 May 2022.
Risto Murto Member of the Board CEO and President, Varma Mutual Pension Insurance Company Born 1963, Ph.D. (Econ.)
Securities Markets Association, Chair of the Board e2 Research, Chair of the Board The Finnish Cultural Foundation, Member of the Supervisory Board Finance Finland (FFI), Board Member The Finnish Pension Alliance TELA, Vice Chair of the Board Finnish National Opera and Ballet, Member of the Supervisory Board Wärtsilä Corporation, Deputy Chair of the Board Finnish Canoeing and Rowing Federation, Board Member
Member of the Board of Directors of Sampo plc since 16 April 2015.
Markus Rauramo
Member of the Board CEO, Fortum Corporation Born 1968, M. Soc.Sc.
Member of the Board of Directors of Sampo plc since 19 May 2021.
When elected, all current Board members were independent of the company. Furthermore, all Board members were independent of the company's major shareholders.
The Board convened nine times in 2022. The attendance of Board members at meetings was 100 per cent.
On 31 December 2022, the members of the Board of Directors owned directly or through legal entities controlled by them Sampo plc's A shares as follows:
| • Björn Wahlroos |
9,229 |
|---|---|
| • Jannica Fagerholm |
7,597 |
| • Christian Clausen |
37,819 |
| • Fiona Clutterbuck |
2,853 |
| • Georg Ehrnrooth |
128,681 |
| • Johanna Lamminen |
2,695 |
| • Steve Langan |
673 |
| • Risto Murto |
4,449 |
| • Markus Rauramo |
1,668 |
The Board members did not have holdings in any Sampo plc share-based rights.
The Board may establish committees, executive committees and other permanent or temporary bodies to deal with tasks prescribed by it. The Board confirms the charters of the committees of Sampo plc's Board and the Group Executive Committee, and also the guidelines and authorisations given to other bodies established by the Board.
The Board has an Audit Committee and a Nomination and Remuneration Committee, whose members it appoints from among its members in accordance with the charters of the respective committees. In accordance with the
Charter of Sampo plc's Audit Committee, matters related to risk management belong under the scope of matters handled by Sampo plc's Audit Committee.
According to its charter, the Committee comprises at least three members elected from among those Board members who do not hold executive positions in Sampo plc and are independent of the company and of which at least one is independent of Sampo plc's significant shareholders.
The responsible Auditor, Group CEO, Group CFO, Group Chief Audit Executive and Group Chief Risk Officer are also participating in the meetings of the Committee.
In 2022, the chair of the Audit Committee was Jannica Fagerholm, and the other members were Fiona Clutterbuck, Georg Ehrnrooth, Johanna Lamminen and Markus Rauramo until 18 May 2022 and Fiona Clutterbuck, Georg Ehrnrooth, Johanna Lamminen and Steve Langan thereafter. Also, the Auditor's representatives, Group CEO, Group CFO, Group CRO and Group Chief Audit Executive participated in the meetings.
management policies and other related guidelines;
the actions and effectiveness of Sampo Group's internal audit;
the effectiveness of internal control and other elements of the system of governance;
The Audit Committee convened four times in 2022 and the attendance of members at the meetings was 100 per cent.
According to the Board Diversity Policy, Sampo plc's Nomination and Remuneration Committee shall identify, review and recommend candidates for the Board. The Nomination and Remuneration Committee shall take the following factors into consideration, including such other factors as the Board may determine:
(I) Regulatory requirements for the members of the Board;
At the AGM the Nomination and Remuneration Committee gives an account of how it has conducted its work and explains its proposals.
According to its charter, the Nomination and Remuneration Committee comprises the chair of the Board (who acts as the committee's chair) and two to three members elected from among the members of the Board.
In 2022 the chair of the Nomination and Remuneration Committee was Björn Wahlroos, and the other members were Christian Clausen and Risto Murto until 18 May 2022 and Christian Clausen, Risto Murto and Markus Rauramo thereafter.
The Committee convened seven times in 2022 and the attendance of members at the meetings was 100 per cent.
fixed salaries and other financial benefits; and
Sampo plc has a managing director who is simultaneously the Group CEO of Sampo Group. The Board of Directors elects and releases the Group CEO and decides on the terms of service and other remuneration.
The Group CEO is in charge of the daily management of Sampo plc, subject to the instructions and control of the Board of Directors. The Group CEO is empowered to take extraordinary and broad ranging actions, taking into account the scope and nature of Sampo plc's operations, only upon authorisation by the Board of Directors. The
Group CEO ensures the legal compliance of Sampo plc's accounting and the trustworthy organisation of asset management.
Mr. Torbjörn Magnusson, licentiate of engineering, is the managing director of the company and the Group CEO. His Group CEO contract is in force until further notice. The Group CEO contract may be terminated by the company with a notice period of 12 months, for which period the Group CEO is entitled to receive salary. In addition, Magnusson is, due to the terms applied in
his previous position in Sampo Group as the CEO of If P&C Insurance Holding Ltd, entitled to a severance compensation corresponding to a maximum of 24 months' fixed salary should i) Sampo plc terminate his service contract or ii) the Group CEO terminate the contract based on either material breach of the contract from the company's part, or based on material changes in the Group CEO's responsibilities due to significant changes in Sampo Group structure or ownership.
The Board of Directors has appointed the Sampo Group Executive Committee to support the Group CEO in the preparation of strategic issues relating to the Group, in the handling of operating matters that are significant or involve questions of principle, and in ensuring a good internal flow of information.
Until February 2022 the Group MD Committee supported the Group CEO in preparing matters to be handled by the Group Executive Committee. The MD Committee was terminated in February 2022 by a decision of the Board of Directors and matters previously belonging to the MD Committee were transferred to the Group Executive Committee. As a result of the change, the Group Executive Committee convenes more often than previously. The Group Executive Committee addresses especially the following: Sampo Group's strategy, profit development,
large purchases and projects, the Group's structure and organisation, as well as key strategic issues pertaining to administration and personnel.
In 2022, the Group Executive Committee convened 12 times at the invitation of the Group CEO.
The following persons served on the Group Executive Committee in 2022:
Torbjörn Magnusson Group CEO, Sampo Group Born 1963, Licentiate of Engineering
Hastings Group, Board Member Nordea Bank Abp, Vice Chair of the Board If P&C Insurance Holding Ltd, Chair of the Board
Member of Sampo Group Executive Committee since 2004.
Knut Arne Alsaker Group CFO, Sampo Group Born 1973, M.Sc. (Econ.)
Hastings Group, Board Member If P&C Insurance Holding Ltd, Board Member Mandatum Life Insurance Company Limited, Vice Chair of the Board
Member of Sampo Group Executive Committee since 2014.
Ingrid Janbu Holthe Head of BA Private, If P&C Insurance Ltd (publ) Born 1982, M.Sc. (Econ.), CEMS MIM
Finance Norway (Finans Norge), Member of the Executive Committee of P&C Insurance
Member of Sampo Group Executive Committee since 2019.
Information as on 31 December 2022. The CVs of members of the Group Executive Committee can be viewed on the Internet at www.sampo.com/management.
Patrick Lapveteläinen Group CIO, Sampo Group Born 1966, M.Sc. (Econ.)
Mandatum Asset Management Ltd, Chair of the Board Mandatum Life Insurance Company Limited, Chair of the Board Saxo Bank A/S, Board Member Enento Group Plc, Chair of the Board If P&C Insurance Ltd, Board Member If P&C Insurance Holding Ltd, Board Member
Member of Sampo Group Executive Committee since 2001.
Petri Niemisvirta CEO, Mandatum Group Born 1970, LL.M.
Midaxo Ltd, Board Member Mandatum Asset Management Ltd, Vice Chair of the Board Finance Finland (FFI), Board Member Alma Media Corporation, Board Member Enento Group Ltd, Chair of the Shareholders' Nomination Board Topdanmark A/S, Board Member Kaleva Mutual Insurance Company, Chair of the Board Varma Mutual Pension Insurance Company, Board Member Confederation of Finnish Industries EK, Member of
Finance and Tax Commission
Member of Sampo Group Executive Committee since 2001.
Morten Thorsrud CEO, If P&C Insurance Holding Ltd Born 1971, M.Sc. (Econ.)
Hastings Group, Board Member Euronext, Member of the Supervisory Board Topdanmark A/S, Board Member Finance Norway (Finans Norge, FNO), Member of the Executive Committee
Member of Sampo Group Executive Committee since 2006.
Information as on 31 December 2022. The CVs of members of the Group Executive Committee can be viewed on the Internet at www.sampo.com/management.
Chief of Strategy, Sampo Group Born 1969, Executive Education, Advanced Management Programme
Mandatum Holding Ltd, Board Member Hastings Group, Chair of the Board Nordea Bank Abp, Chair of the Shareholders' Nomination Board Nordax Bank AB (publ), Board Member Topdanmark A/S, Chair of the Board If P&C Insurance Holding Ltd, Board Member
Member of Sampo Group Executive Committee since 2005.
On 31 December 2022, the Group CEO and other members of the Executive Committee owned, directly or through legal entities controlled by them, Sampo plc's A shares as follows:
| • Torbjörn Magnusson |
46,480 |
|---|---|
| • Knut Arne Alsaker |
39,646 |
| • Ingrid Janbu Holthe |
1,875 |
| • Patrick Lapveteläinen |
276,423 |
| • Petri Niemisvirta |
93,470 |
| • Morten Thorsrud |
61,344 |
| • Ricard Wennerklint |
45,200 |
The Group CEO and the other members of the Executive Committee did not have holdings in any Sampo plc sharebased rights.
Information as on 31 December 2022. The CVs of members of the Group Executive Committee can be viewed on the Internet at www.sampo.com/management.
| Reporting 21 |
|
|---|---|
| Financial reporting21 | |
| Non-financial reporting (sustainability)22 | |
| Risk management 23 |
|
| Risk management system23 | |
| Risk management reporting and governance framework 26 |
|
| Compliance function28 | |
| Insider administration29 | |
| Whistleblowing 30 |
|
| Principles for related party transactions30 | |
| Internal audit31 | |
| External auditor 32 |
The different sectors of Sampo Group's internal control system play a crucial role in ensuring the proper functioning of the Group's corporate governance system.
Internal control means all activities which ensure that Sampo Group's businesses are carried out towards desired targets in accordance with desired policies and practices and in compliance with applicable legal and regulatory requirements. Accordingly, the tasks of internal control are performed by different actors within the organisation starting from top management.
The organisation of internal control and safeguarding its functioning and viability play a key role in the activities of the Board of Directors of Sampo plc. In order to ensure the proper running of operations, Sampo plc's Board has approved Group level policies and guidelines concerning corporate governance, financial target setting, risk management, remuneration, compliance, reporting and internal audit in conformity with and supplementing the existing legal and regulatory framework. With the policies and guidelines Sampo plc's Board directs the Group's activities towards desired practices and, with appropriate control mechanisms provided by the policies, ensures that potential deviations are discovered without undue delay.
Thus, a successful internal control system presumes not only controlled steering processes for business management, but also appropriate control mechanisms. In Sampo Group, the internal control system includes managing risks as an integrated part of business activities, functions supporting the businesses, as well as control and steering functions, which are organised as independent from the businesses.
In addition to internal control activities within the financial reporting process and risk management, Sampo Group's compliance function, with insider administration supplementing it, together with a fully independent internal audit function form core parts of Sampo plc's internal control system.
The financial reporting process aims to ensure that Sampo plc's Board of Directors and executive management have timely and reliable information supporting their decision-making, and that external interest groups can also rely on the financial information provided to them.
To ensure the accuracy of all reporting, the used databases are reconciled on a monthly basis. Several systems and analytical tools are also applied to support efficiency and accuracy in the reporting process.
Group level financial reporting is based on information provided by the parent company as well as the Group companies according to formats and schedules defined by the Group's financial functions (p. 22). Each Group company is responsible for its respective financial reporting and related internal controls. Consequently, the process ensures the accuracy of the information regarding different business segments prior to reporting to the parent company.
Sampo Group's financial reporting is organised under Group Control and Group Accounting functions and it operates under the Group Chief Financial Officer. The Group Control function prepares and follows Group level and parent company's financial targets and forecasts, follows profit development and forecasts of the Group companies and takes care of monthly reporting and forecasting of profit development of the Group as well as quantitative Solvency II reporting. It also produces different types of valuations, market analyses and reviews. The Group Control function is also responsible for the Group's annual and quarterly quantitative Solvency II reporting to the supervisory authorities.
The Group Accounting function prepares Sampo Group's quarterly and annual financial reports in accordance with International Financial Reporting Standards (IFRS). The financial reports of the parent company, Sampo plc, are prepared in accordance with Finnish accounting standards (the Finnish GAAP). Quarterly and annual reports are dealt with in the Group's administrative bodies in accordance with applicable procedural rules. In addition, the Group Accounting function prepares the Group's monthly accounts, which form the basis of the monthly analysis prepared by the Group Control function.
Introduction Governance
A Management Report is distributed on a monthly basis to the members of the Group Executive Committee, and a summary of it is delivered to the members of Sampo plc's Board of Directors on a regular basis.
Profit forecasts are reported quarterly to the Group Executive Committee, the Board and its Audit Committee. Group solvency calculations are also delivered on a quarterly basis to the Group Executive Committee, the Board and its Audit Committee.
Sampo Group is committed to developing the sustainability activities of the Group, as well as the related reporting, indicators, and targets. This is in the interests of, and expected by, the Group's internal and external stakeholders.
Sampo plc's Board of Directors has the ultimate oversight of Group level sustainability, covering the entire range of environmental (including climate change), social, and governance (ESG) matters. The Board has assigned its Audit Committee to monitor Sampo Group's sustainability reporting and activities.
The Group CFO, who is a member of the Sampo Group Executive Committee, directs Sampo plc's Sustainability function. The Group CFO also ensures that adequate reporting on sustainability matters is provided to the Group CEO.
The Sustainability function of Sampo plc, led by the Head of Sustainability, is responsible for the development and coordination of sustainability at Group level. The function prepares the Group level sustainability reporting and the sustainability programme, which sets the direction for the Group's sustainability work. In addition, the function sets schedules, requests, and Group level guidance to the Group companies and organises regular sustainability meetings.
At each Group company, various business areas, operational departments, and functions are actively involved in the Group's sustainability endeavours and reporting. Group level sustainability reporting is largely based on information provided by the Group companies according to formats and schedules defined by Sampo plc's Sustainability function. Each Group company is responsible for its respective reporting to the parent company to ensure correctness of information.
Sampo Group's Sustainability Report is published annually and as soon as possible after the publication of the Board of Directors' Report and Financial Statements, but no later than 30 June. The Sustainability Report 2022 will be published in May 2023, covering the period from 1 January to 31 December 2022.
Board-appointed committees
Group CEO Sampo Group
Internal control in Sampo Group
The Board of Directors of Sampo plc is responsible for ensuring that the Group's risks are properly managed and controlled. The Board establishes both the risk management principles and closely connected remuneration principles and provides guidance on the risk management governance structure and internal control in the business areas. Working within the framework of these principles and guidelines, the Group companies tailor their risk management practices to take account of the special features of their respective business activities. The Board makes decisions on strategy, return targets and overall guidelines regarding capital management.
The Board's Audit Committee is responsible, on behalf of the Board of Directors, for preparing Sampo Group's Risk Management Principles and related guidelines and, in turn, the Nomination and Remuneration Committee is responsible for preparing the Group's Remuneration Principles, which are closely connected with the Risk Management Principles.
The duty of Sampo Group's Risk Management function is to control the effective operation of the risk management system within the Group companies and to monitor, review and report on Group level risks and risk management, including the parent company.
High-quality, comprehensive risk management facilitates that Sampo plc's executive management and Board of Directors are constantly aware of the Group companies' business-related risks and their ability to carry the financial and other risks related to business activities.
Sampo Group's business activities and therefore also their corresponding risk management activities are mainly performed by the Group companies. The illustration on the next page presents the prerequisites, tasks and targets of company level risk management.
The Group companies' risk management is based on the Risk Management Principles established by the parent company. The Group companies organise their own risk management based on these Group level principles taking into account the business-specific characteristics as well as laws and regulations.
The prerequisites for facilitating successful risk management include the following:
Board-appointed committees
Group CEO Sampo Group
The tasks included in the risk management process can be classified as follows:
earnings: Financial and risk management functions are explicitly responsible for preparing the above prerequisites for risk management and operationally they are responsible for independent measurement and control, including monitoring of operations in general as well as profitability, risk and capitalisation calculations.
Business units and financial and risk management functions are both active in supporting the business with continuous analysis and assessment of opportunities. The insurance and investment business units assess business opportunities, especially their risk return ratios, on a daily basis. In the financial and risk management functions, on the other hand, a considerable amount of time is spent on risk analysis and reporting as well as capital planning.
Actions: Transactions representing the actual insurance and investment operations are performed in accordance with the given authorisations, risk policies and other instructions. These actions are the responsibility of business and investment functions. Activities related to capitalisation and liquidity positions are included in this part of the process.
In Sampo Group, proactive profitability, risk and capital management actions are seen as the most important phase in the risk and capital management processes. Hence, risk policies, limits and decision-making authorisations are set up in a way that they, together with profitability targets, facilitate business and investment units to take carefully considered risks.
High-quality execution of the above-mentioned tasks contributes to the achievement of the three central targets of risk management:
When the above targets are met, risk management is contributing positively to return on equity and mitigating the yearly fluctuations in profitability. Risk management is therefore considered to be one of the contributors in creating value for the shareholders of Sampo plc.
Sampo Group's risk management reporting is divided into five separate business areas, which are If, Topdanmark, Hastings, Mandatum and the parent company (Sampo plc).
Sampo plc's Board of Directors and the Audit Committee, together with the boards of directors of the Group companies, share the overall responsibility for the Group's risk management system. The business units are responsible for day-to-day risk management decisions within the framework of the provided principles, guidelines and authorisations (limits). The Sampo Group Risk Committee ensures effective communication and cooperation regarding risk management and risk reporting within Sampo Group.
The risks of If are monitored by the Own Risk and Solvency Assessment ("ORSA") Committee (together with its subcommittees) and the Investment Control Committee.
In Mandatum Group all risks are monitored and coordinated in the Risk Management Committee. The Asset and Liability Committee reports to the Risk Management Committee and has the key role to monitor and control the market risks arising from the company's with-profit business.
In Topdanmark, risks are monitored by the risk management function. The function reports to the Risk Management Committee, which is responsible for risk policies, risk limits, solvency calculations, capital plans, Topdanmark's own risk and solvency assessment, and Topdanmark's partial internal model for non-life insurance risks.
In Hastings, the boards of the Hastings Group's trading entities delegate the oversight of the respective company's risk management frameworks to the relevant risk committees. Each company has its own risk management governance arrangements to ensure that all risks are reported to, and reviewed by, the respective company board and its risk committee.
More detailed information on Sampo plc's risk management is available in Sampo plc's Risk Management Report at www.sampo.com/year2022.
Internal control in Sampo Group
In Sampo Group, compliance is an activity supporting business activities while being independently administered, ensuring the compatibility with applicable norms of all Group activities.
The starting point of the Sampo Group Compliance Principles is that compliance with norms is an established part of Sampo plc's corporate culture, and the principles ensure that compliance activities are properly organised in Group companies, and that the business organisation is capable of responding to the changing requirements of the business environment. The guidance contains the perceived common denominators of successful compliance activity – a set of general principles that describe essential features of effective compliance activities within the context of the business environment in which Sampo Group companies are operating. The principles do not, however, limit the flexibility of each Group company when addressing its own specific needs in relation to compliance.
Sampo Group Compliance Principles apply to all Sampo Group companies. It should, however, be noted that different Group companies are operating different business lines in various different national jurisdictions, thus being under an obligation to abide with local
legislation as well as authority rules and regulations. Consequently, the principles have been defined to facilitate the deployment of a set of tools and procedures serving best the individual needs for each company and local operating environment, and ensure full compliance without jeopardising operational efficiency. The aforesaid obviously implies that the compliance function in each Group company must always meet the local standards and other requirements.
According to the approved principles all compliance activity is designed to ensure that all business activities, as well as the reporting of financial results and risks, are at all times compliant with laws, authority regulations and internal guidelines and principles.
The compliance function also ensures that any applicable new legislation and regulation is fully enforced in Group companies' guidelines and day-to-day business activities.
According to the principles, the Group companies are permitted to organise their compliance activities operationally and organisationally as they deem pertinent and effective. In the organisation chart (p. 30), the compliance function is viewed from the parent company's point of view.
Reporting of compliance activities is organised in each Group company as deemed appropriate and sufficient locally. Compliance matters are also regularly reported to the parent company's Board of Directors' Audit Committee, as determined in the Sampo Group Compliance Principles. Sampo plc's compliance organisation is responsible for compiling these reports on the basis of the subgroup specific reports provided by the Group companies.
The CEO of Sampo Group is responsible for the proper organisation of the compliance function in the parent company and the Group as a whole. The Board of Directors of each Group company ensures that the Group company has sufficient resources to organise effective internal control and compliance, while each Group company's Managing Director is responsible for organising the respective Group company's compliance function.
Insider administration
Given the nature of Sampo Group's business areas, especially bearing in mind the extensive investment activities of Sampo Group companies, Sampo plc's Board of Directors has approved separate Guidelines for Insiders that is binding on all persons employed by Sampo Group as well as on members of Sampo plc's Board of Directors. In addition to current supranational law, such as the Market Abuse Regulation (Regulation (EU) No 596/2014 of the European Parliament and of the Council ("Market Abuse Regulation")), applicable national law, including Nasdaq Helsinki's Guidelines for Insiders and the Financial Supervisory Authority's regulations, as well as statements and interpretations, have been taken into account in compiling the Guidelines for Insiders.
The Group Executive Committee, all Sampo plc's employees and other Group's employees working with interim statements and other financial announcements and persons having access to such documents before publication thereof are under the following restrictions on trading:
In addition to regulatory supervision, compliance with the obligations under the Guidelines for Insiders and the underlying legislation is supervised by the Insider Administration, which is a group function centralised in Sampo plc and led by the person in charge of insider matters.
Sampo Group's Guidelines for Insiders is available at www.sampo.com/insiders.
As a Nasdaq Copenhagen listed entity, Topdanmark A/S has its own insider procedure applicable to Topdanmark's financial instruments, as is required by Danish regulations.
Internal control in Sampo Group
Sampo plc has a whistleblowing channel, which is based on the Market Abuse Regulation.
In connection with the entering into force of the Market Abuse Regulation, Sampo plc adopted an internal procedure for all employees to report infringements of both internal and external rules and regulations. All
whistleblowing notifications are investigated promptly in a confidential manner while protecting the identity of the whistleblower as far as possible. During 2022, no whistleblowing notifications were reported.
Sampo Group companies have established their own whistleblowing channels designed to serve their personnel and relevant interest groups.
Sampo Group companies may not, as a general rule, enter into an agreement with related parties subject to terms and conditions that differ from those Sampo plc or its Group companies normally apply, or other agreements that are not commercially justified, with or for the benefit of certain individuals. All related party transactions shall be based on written agreements in accordance with the relevant local regulation and in the ordinary course of business and on arms-length terms.
Related party transactions in Sampo Group are traditionally purchases of internal services, or other services or products that are part of the ordinary business of a Group company.
Sampo Group's guidelines on related party transactions apply to all group companies and they set the groupwide principles for monitoring and assessing as well as decision making and reporting of related party transactions. The rules for the company level identification, decision making, and reporting processes are set in the company level policies of each Group company, as approved by the Board of Directors of each Group company.
Related party transactions that are not part of the company's ordinary course of business or are made in deviation from customary commercial terms, require a decision of Sampo plc's Board of Directors to carry out the related party transaction. Such related party transactions shall be reported to the Group Compliance prior to entering into the transaction.
Each Sampo subgroup shall maintain a register of the related parties linked to the company within Sampo Group by close links and the reported related party transactions.
An accumulated list concerning the agreements of the related parties of Sampo plc shall be sent to Sampo plc's Board of Directors or its committee annually. The Board of Directors or its committee must monitor and assess how agreements and other legal acts between the company and its related parties meet the requirements of ordinary activities and arm's length terms.
Additionally, in accordance with the Solvency II regulation, Sampo Group companies must report all significant related party transactions to the relevant supervisory authorities.
Internal Audit is a function, independent of business operations, which evaluates the efficiency and effectiveness as well as the maturity of the internal control system within Sampo Group. The function helps the organisation to accomplish its objectives by a systematic, disciplined approach to evaluate and improve the effectiveness of the risk management, control and governance processes. The Group function is organised under the Board of Directors of Sampo plc and it reports to Sampo plc's Board and Audit Committee. It is managed by the Group Chief Audit Executive, who is appointed by the Board of Directors of Sampo plc. Internal audit functions are established in each subgroup and legal entities as regulations demand and approved by the respective Board of Directors or equivalent.
The work is carried out in accordance with the Sampo Group Internal Audit Policy, approved by the board of directors of each Group company. According to the Policy, the Internal Audit applies the mandatory guidance of the Institute of Internal Auditors as applicable.
The Internal Audit establishes an internal audit activity plan for the regulated companies. A period for the activity plan may be defined in the subgroups. The plans are updated annually and approved by the board of directors in the respective legal entity. The plans of the subgroups are presented for Sampo plc's Audit Committee's information. The approach is risk based considering the focus areas. The External Audit is informed about the internal audit activity plans.
The Internal Audit function reports on the audits and follow-up activities performed to the Board of Directors of the legal entities, and to Sampo plc's Audit Committee. Company-specific audit observations are reported to the respective companies' management. Furthermore, the function submits activity reports to Sampo plc's Audit Committee and the Board of Directors in all regulated entities at least twice a year. These reports include any significant deficiencies detected, including follow-up issues related to the risks not been mitigated or remedied according to the agreed action plans. In addition, an annual internal audit report is issued for Sampo Group.
The Group Chief Audit Executive is responsible for ensuring that a quality assurance and improvement programme is established in the internal audit functions. The results are reported to Sampo plc's Audit Committee.
• Deloitte Ltd Authorised Public Accountant Firm
• Jukka Vattulainen, Authorised Public Accountant Principally responsible auditor
Audit firm Deloitte has acted as Sampo plc's as well as If Group's, Hastings Group's and Mandatum Group's Auditor in 2022. KPMG P/S was elected as Topdanmark's Auditor in 2022. The fees paid by Sampo Group companies to the Auditors for statutory audit services in 2022 totalled approximately EUR 4.6 million. In addition, Sampo Group companies paid the Auditors a total of approximately EUR 1 million in fees for non-audit services, which is at most 23 per cent of the fees paid by Sampo Group companies to the Auditors for statutory audit services.
The fees Sampo plc paid to Deloitte Ltd for statutory audit services invoiced in 2022 totalled approximately EUR 975,000. In addition, Deloitte Ltd was paid a total of approximately EUR 112,000 in fees for non-audit services rendered to Sampo Group.
Sampo plc's AGM held on 18 May 2022 elected Deloitte Ltd to act as Sampo plc's Auditor with APA Jukka Vattulainen as the auditor with principal responsibility. Deloitte Ltd has carried out the statutory audit of Sampo plc as of the statutory tendering and selection procedure performed in 2021. APA Jukka Vattulainen has acted as Sampo plc's principally responsible auditor since May 2021.
Internal control in Sampo Group
Sampo plc, Fabianinkatu 27, 00100 Helsinki, Finland Phone: +358 10 516 0100 | Business ID: 0142213-3 www.sampo.com
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