In Metsä Group, internal control covers the control of financial and business operations from a risk-oriented perspective. Internal control is implemented by the Board of Directors, the Audit Committee and the operative management, as well as the entire personnel. Internal control refers to those management activities that seek to ensure:
- achievement of the goals and objectives set for Metsä Group
- economical, appropriate and efficient use of resources
- management of operational risks
- reliable and correct financial and other management information
- adherence to external regulations and internal policies
- adherence to appropriate procedures related to customer relationships
- sufficient security of operations, information and property
- arrangement of adequate and appropriate manual and IT systems to support operations.
Internal control is divided into: (i) proactive control, such as defining Metsä Group’s values and general operational and business principles, as well as its goals and strategy; (ii) daily control, such as general control and follow-up with operational systems and work guidelines, related to operational steering; and (iii) subsequent control, such as different management evaluations and inspections, comparisons and verifications, the aim of which is to ensure that the goals are met and that the agreed operational and control principles are followed. Metsä Group’s corporate culture, governance and the approach to control together create the basis for the entire process of internal control.
Internal monitoring of the financial reporting process, credit control and authorisation rights
The financial organisations of the business areas and the Group are responsible for financial reporting. The units and business areas report their financial figures each month. Business area controllers check the monthly performance of units in each business area and report them further to the Group’s financial administration. Business area profitability development and business risks and opportunities are discussed monthly at the Metsä Group Executive Management Team meetings attended by the senior management of Metsä Group and of each business area, and at
financial management team meetings attended by the Group CFO and director of finance and the CFO of each business area, among others. The results are reported to the Board of Directors of Metsäliitto Cooperative each month. The results of the business areas are additionally reported to the Boards of Directors of their parent companies each month. Metsä Group’s Controllers’ Manual describes the reporting and control regulations and the reporting procedure in detail.
Credit control in Metsä Group is carried out by each business area in accordance with the Group credit control policy and the business area-specific credit control policy based on it. Credit control is carried out by the Group’s central credit control organisation in cooperation with the management of the business areas.
Authorisation rights concerning expenses, significant contracts and investments have been specified stepwise for different organisational levels, according to the decision-making order confirmed by the Board and the authority separately granted by the President and CEO and other management personnel.
Investment approval and follow-up are carried out by the business areas and the Group’s financial administration according to the decision-making order and investment policy approved by the Board of Directors. The most significant investments are prepared in cooperation with the Group’s technology
unit and, when the decision-making order so requires, they are separately reviewed by the Group’s Executive Management Team and approved by the parent company’s Board of Directors or the Board of Directors of the business area’s parent company. The technology unit ensures that the final reporting and
further monitoring of these projects are carried out in accordance with the investment policy.