Risk management: methods and approaches
The Company applies the following set of risk management methods and approaches in line with its Internal Control and Risk Management Policy:
- risk management is an integral part of all organizational processes: it is not segregated from the Company’s key business activities and processes;
- risk management is an integral part of decision-making: it helps the decision makers to make informed choices, prioritize initiatives and find the best solutions among alternatives;
- risk management is essential to RusHydro’s continuous improvement: the Company refines and enhances its corporate system of internal control and risk management to raise the level of its risk management maturity;
- the Company fosters a risk-focused organizational culture;
- the top management sets risk management as a priority, makes sure that risk management knowledge and skills are shared throughout the Company and the Group, promotes learning of the basics of risk management and advances the corporate culture centred around the risk-based approach to management;
- the Company’s management ensures effective information exchange and setting of communication standards as part of corporate risk management.
Pursuant to RusHydro’s Strategic Management Regulations, the Company maintains a strategic risk register which identifies risk owners and is reviewed annually and approved by the Management Board. Strategic risks that are deemed critical or material are addressed in the risk mitigation plan which identifies action owners, deadlines and deliverables and is approved by the Management Board. Performance against the risk mitigation plan is measured when determining employees’ bonus awards. The implementation of the risk mitigation plan and its progress are monitored and overseen by the Company’s risk managers.Risk managers maintain an ongoing interaction with the Audit Committee of the Board of Directors as the body overseeing RusHydro’s risk management system in line with the Guidelines on Audit Committees of the Boards of Directors of Joint-Stock Сompanies with a Stake Owned by the Russian Federation (approved by order No. 86 of the Federal Agency for State Property Management (Rosimuschestvo) of March 20, 2014).