Business ethics risk

High ethical standards, respect for human rights and labor laws are the foundation for a strong and sustainable business. The risk of bribery and corruption or the risk of investing in companies with insufficient ethical business conduct, poor working conditions or non-compliance with labor rights, all carry a reputational risk and can have a significant negative effect on both Investor, the portfolio companies and other stakeholders. 

Risk Mitigating Actions: The Board has adopted a Policy framework with principles on how Investor should act as a responsible owner and company. Investor has set clear expectations on all portfolio companies to act responsibly and ethically. It is the responsibility of each portfolio company and its board and management to analyze and take systematic action to reduce these risks. New portfolio companies are evaluated in the investment process’ due diligence. Investor follows up the subsidiaries on a range of areas within governance, ethics, risk and compliance, all selected based on risk assessment. Preventive measures include regular risk assessments, procedure development to mitigate risk, regular training to strengthen awareness and having whistleblowing channels implemented. 

Regulatory risk

All businesses and operations are affected by laws, regulations, agreements, sanctions and other regulatory requirements. Non-compliance with any of the above will significantly affect the business and reputation 
negatively, for both Investor and the portfolio companies.

Risk Mitigating Actions: Compliance with laws and regulations is a basic principle in the Policy framework 
adopted by the Board. Preventive measures taken are among other internal controls implemented in procedures as well as control functions following-up on compliance. The regulatory environment is continuously monitored in order to prepare for changes that may impact the business.