Corporate Governance

 

Corporate Governance

In their decision-making and corporate governance, OP Financial Group and its central cooperative, OP Cooperative, comply with the laws of Finland and standards issued by virtue of them.

OP Financial Group’s operations are specifically governed by the Act on the Amalgamation of Deposit Banks (Laki talletuspankkien yhteenliittymästä), the Act on Cooperative Banks and Other Cooperative Institutions, the Act on Credit Institutions, the Insurance Companies Act and the Co-operatives Act.

Taking into account the specific characteristics of the cooperative system, OP Financial Group’s Corporate Governance conforms, whenever applicable, with the Finnish Corporate Governance Code approved by the Securities Market Association in October 2015.

In addition, OP Financial Group follows the Code of Business Ethics in its operations.

The Corporate Governance principles describe the structure and tasks of OP Financial Group and its key functions and units, the duties and responsibilities of key administrative bodies, Group and corporate steering principles, as well as internal control and financial reporting. Corporate Governance enables OP Financial Group to ensure that its operations are open and transparent.

Corporate Governance is available on OP's website.

Download OP Financial Group's Corporate Governance Statement 2017 here.

 

 

 

Supervisory board

 

Supervisory Board

OP Cooperative supervisory Board Members by Federation of Cooperative Banks as of 21 March 2017

(members elected on the basis of capital adequacy and whose term is marked with parentheses)
*All managerial duties in OP Financial Group and its entities are counted in the number of managerial positions, including those listed in this table and the tables below.
**The column with the person’s full-time position lists the number of managerial positions outside OP Financial Group.

Name, year of birth and place of residence

Federation of Cooperative Banks and member’s term of office

Position on OP Cooperative's Supervisory Board
(number of managerial positions within the Group in parentheses)*

Full-time position, job title, education/degree(s)
(number of managerial positions outside the Group in parentheses)**

Position of the person with an administrative staff background at a cooperative bank

Arvio Kalle, 1964,
Siikajoki

Pohjois-Pohjanmaa, 2015–(2018)

Member (3)

Managing Director,
Ruukin Osuuspankki, Diploma in Business and Administration, MBA, LKV (authorised real estate agent), APV1 degree (-)

 

Bäckman Tiina,
1959, Oulu

Other member (elected without following the regional principle)
2017–2020

Member (2)

Rautaruukki Pension Fund, Chair of the Board of Directors (3)

 

Eklund Ola, 1952, Raasepori

Sydkusten,
2016–2019

Member (3)

Managing Director,
Wintem-Agency Oy,
M. Eng.(1)

Chair of the Board of Directors,
Andelsbanken Raseborg

Enberg Leif, 1954, Korsnäs

Österbotten, 2016–2019

Member (5)

Entrepreneur, Mapromec Ab, M. Sc. (Econ. & Bus. Adm.) (1)

Chair of the Board of Directors, Korsnäs Andelsbank

Eskola Tapani, 1953, Kotka

Kaakkois-Suomi, 2015–(2018)

Member (3)

M.Sc. (Tech.) (1)

Chair of the Board of Directors, Kymmenlaakson Osuuspankki

Harju Anne, 1969, Salla

 Lappi, 2016–(2018)

Member  (3)

Managing Director, Sallan Osuus, M.Sc. (Agriculture and Forestry) (-)

 

Heinonen Jarna, 1965, Kaarina

Varsinais-Suomi, 2015–(2018)

Member (3)

Professor in Entrepreneurship, Turku School of Economics, University of Turku, D.Sc. (Econ. & Bus. Adm.) (-)

Chair of the Board of Directors, Turun Seudun Osuuspankki

Hinkkanen Mervi, 1954, Kontiolahti

Pohjois-Karjala 2017–2020

Member (2)

 Coordinator, Karelia University of Applied Sciences,
Bachelor of Hospitality Management, MBA (-)

Chair of the Board of Directors, Pohjois-Karjalan Osuuspankki

Hyrskyluoto
Jorma, 1950,
Tampere

Pirkanmaa,
2015–(2018)

Member (3)

 M.Sc. (Econ.) (-)

Chair of the Board of Directors, Tampereen Seudun Osuuspankki

Hällfors Terttu, 1955, Ulvila

Satakunta,
2017–2020

Member (2)

Health Centre Physician, Ulvila Health Centre, Lic. Med. (-)

Chair of the Board of Directors, Länsi-Suomen Osuuspankki

Jurmu Taija, 1976, Rovaniemi

Lappi,
2016–2019

Member (4)

Lawyer,
Asianajotoimisto Jurmu,
Master of Laws, Degree of Bar, ABM Chair (-)

Vice Chair of the Board of Directors, Pohjolan Osuuspankki

Järvi Ulla, 1952, Kokkola

Keski-Pohjanmaa,
2015–(2018)

Member (2)

Certified public accountant, M.Sc. (Econ. & Bus. Adm.) (-)

Supervisory Board Chair, Kokkolan Osuuspankki

Kaakko Marja-Liisa, 1965, Kalajoki

Keski-Pohjanmaa,
2016–2019

Member (2)

Senior Lecturer, Centria University of Applied Sciences, M.Sc. (Econ.), M.Sc. (Econ. & Bus. Adm.) (-)

Member of the Board of Directors, Kalajoen Osuuspankki

Kiander Jaakko, 1963, Helsinki

Other member (elected without following the regional principle)
2015–2018

Member (2)

Director, Ilmarinen Mutual Pension Insurance Company, Dr.Soc.Sc. (1) 

 

Kietäväinen
Seppo, 1959, Juva

Suur-Savo, 2015–2018

Member (3)

M.Sc.(Agric.)

Chair of the Board of Directors, Suur-Savon Osuuspankki

Kiiskinen Juha, 1956, Sulkava

Suur-Savo,
2015–(2018)

Member (2) 

BA (-)

Chair of the Board of Directors,
Sulkavan Osuuspankki 

Koivula Olli,
1955, Kitee

Pohjois-Karjala, 2017–(2018)

Member (2)

Managing Director,
Kiteen Seudun Osuuspankki, M.Sc. (Econ. & Bus. Adm.), M.Sc.(Agric.) (-)

 

Korkonen Jaakko, 1966, Seinäjoki

Etelä-Pohjanmaa, 2015–2018

Member (2)

Lecturer, Seinäjoki Joint Municipal Authority for Education / Vocational Adult Education Sedu, M. Eng., certificate in educational administration (-)

Chair of the Board of Directors, Peräseinäjoen Osuuspankki

Krohns Petri, 1964, Lappeenranta

Kaakkois-Suomi, 2015–2018

Member (3)

Managing Director
Etelä-Karjalan Osuuspankki, LL.M, Trained on the bench, MBA (-)

 

Kuosa-Kaartti Katja-Riina, 1973, Orimattila

Etelä-Suomi, 2016–(2018)

Member (3)

Authorised public accountant, Tilintarkastus Kuosa-Kaartti Oy, M.Sc. (Econ. & Bus. Adm.) (1)

Chair of the Board of Directors,
Orimattilan Osuuspankki

Kupsala
Tuomas, 1967,
Korpilahti

Keski-Suomi,
2015–(2018)

Member (3)

Managing Director,
Korpilahden Osuuspankki, M.Sc. (Econ. & Bus. Adm.), eMBA
(-)

 

Kääriäinen Jukka, 1953, Iisalmi

Pohjois–Savo,
2015–2018 

Member (2)

Planner,
Social Insurance Institution of Finland, M.Soc.Sc. (-)

Supervisory Board Chair, Pohjois-Savon Osuuspankki

Laine Timo, 1959, Lahti

Etelä-Suomi,
2017–2020

Member (4)

Managing Director,
kauppaneuvos (Finnish honorary title)
Päijät-Hämeen Osuuspankki, LL.M, Trained on the bench, eMBA (-)

 

Luomala Juha,
1963, Valkeakoski

Pirkanmaa,
2017–2020

Member (3)

Managing Director,
Valkeakosken Osuuspankki, M.Sc. (Econ. & Bus. Adm.), LKV (authorised real estate agent) (-)

 

Mikkola Ari, 1955, Tammela

Varsinais-Suomi,
2015–(2018)

Member (2)

Unit Director, Häme University of Applied Sciences Oy, Bachelor of Agriculture
(-)

Vice Chair of the Board of Directors, Lounaismaan Osuuspankki

Mäkelä Anssi,
1961, Urjala

Pirkanmaa,
2017–(2018)

Member (2)

Senior Manager,
Valmet Technologies Oy, M.Sc. (Tech.) (1)

Chair of the Board of Directors, Urjalan Osuuspankki

Nikola Annukka, 1960, Kirkkonummi

Etelä-Suomi,
2015–(2018)

Member (4)

Director, Administration,
Konehuone Oy, M.Sc. (Econ. & Bus. Adm.), M.Sc. (Econ.) (1)

Chair of the Supervisory Board,
Länsi-Uudenmaan Osuuspankki

Näsi Olli, 1963, Huittinen

Satakunta,
2016–(2018)

Member (3)

Managing Director,
Satakunnan Osuuspankki, LL.M, Trained on the bench, eMBA (1)

 

Palomäki Riitta,
1957, Helsinki

Other member (elected without following the regional principle)
2017–2020 

Member (2)

M.Sc. (Econ. & Bus. Adm.) (-)

 

Pehkonen
Jaakko, 1960,
Jyväskylä

Keski-Suomi,
2017–2020

Chair of the Supervisory Board (5)

 

 Professor of Economics, University of Jyväskylä, D.Sc. (Econ. & Bus. Adm.) (-)

Chair of the Board of Directors, Keski-Suomen Osuuspankki 

Pullinen Juha, 1963, Pöytyä

Varsinais-Suomi,
2015–2018

Member (3)

Managing Director,
Loimaan Seudun Osuuspankki, M.Sc. (Agriculture & Forestry), M.Sc. (Forestry) (-)

 

Sahlström Petri, 1971, Oulu

Pohjois-Pohjanmaa,
2016–2019

Member (3) 

Dean, University of Oulu, Oulu Business School, D.Sc. (Econ. & Bus. Adm.) (-)

Vice Chair of the Board of Directors, Oulun Osuuspankki 

Tarkkanen Olli, 1962, Seinäjoki

Etelä-Pohjanmaa, 2015–(2018)

Second Vice Chair of the Supervisory Board (4)

 Managing Director, Etelä-Pohjanmaan Osuuspankki, LL.M, Trained on the bench, eMBA (-)

 

Väisänen Mervi, 1963, Sotkamo

Kainuu,
2016–2019

First Vice Chair of the Supervisory Board
(7)  

 Lecturer, marketing,
Kajaani University of Applied Sciences, M.Sc. (Econ. & Bus. Adm.) (-) 

Vice Chair of the Board of Directors, Kainuun Osuuspankki 

 Väänänen Ari, 1973, Maaninka

 Pohjois-Savo,
2015–(2018)

Member (3) 

Managing Director,
Maaningan Osuuspankki, LL.M, Trained on the bench (-)

 

Ylimartimo Arto,
1959, Oulunsalo

Other member (elected without following the regional principle)
2017–2020

Member (2)

 Proventia Group Oy, Chair of the Board
M.Sc. (Econ. & Bus. Adm.), Authorised public accountant (2)

 

Members of Supervisory Board Working Committee:

Name and year of birth

Role

Education/degree(s)

Full-time position, job title

Jaakko Pehkonen, 1960

Chair

D.Sc. (Econ. & Bus. Adm.)

Professor of Economics, University of Jyväskylä

Mervi Väisänen, 1963

Vice Chair

M.SC. (Econ. & Bus. Adm.)
M.Sc. (Econ.)

Senior lecturer in marketing, Kajaani University of Applied Sciences

Olli Tarkkanen, 1962

Member

LL.M, Trained on the bench, eMBA

Managing Director, Etelä-Pohjanmaan Osuuspankki

Kalle Arvio, 1964

Member

Diploma in Business and Administration, MBA, LKV (authorised real estate agent), APV1 degree

Managing Director, Ruukin Osuuspankki

Leif Enberg, 1954

Member

M.Sc. (Econ. & Bus. Adm.)

Entrepreneur, Oy Mapromec Ab

Tapani Eskola, 1953

Member

M.Sc. (Tech.)

 

Jorma Hyrskyluoto, 1950

Member

M.Sc. (Econ.)

 

Timo Laine, 1959

Member

LL.M, Trained on the bench, eMBA

Managing Director, kauppaneuvos (Finnish honorary title), Päijät-Hämeen Osuuspankki

Juha Pullinen, 1963

Member

M.Sc. (Agriculture & Forestry), M.Sc. (Forestry)

Managing Director, Loimaan Seudun Osuuspankki

Members are annually elected at the regrouping meeting of the Supervisory Board following the Annual Cooperative Meeting.

Members of Supervisory Board Audit Committee:

Name and year of birth

Role

Education/degree(s)

Full-time position, job title

Jarna Heinonen, 1965

Chair

D.Sc. (Econ. & Bus. Adm.)

Professor in Entrepreneurship, Turku School of Economics, University of Turku

Riitta Palomäki, 1957

Vice Chair

M.Sc. (Econ. & Bus. Adm.)

 

Jaakko Kiander, 1963

Member

Dr.Soc.Sc.

Director, Ilmarinen Mutual Pension Insurance Company

Katja Kuosa-Kaartti,
1973

Member

M.Sc. (Econ. & Bus. Adm.)

Authorised public accountant, Tilintarkastus Kuosa-Kaartti Oy

Anne Harju, 1969

Expert member (2017–2018)

M.Sc. (Agriculture and Forestry)

Managing Director, Sallan Osuuspankki

Petri Krohns, 1964

Expert member (2017–2018)

LL.M, Trained on the bench, MBA

Managing Director, Etelä-Karjalan Osuuspankki

Ari Väänänen, 1973

Expert member (2016–2018)

LL.M, Trained on the bench

Managing Director, Maaningan Osuuspankki

Members are annually elected at the regrouping meeting of the Supervisory Board following the Annual Cooperative Meeting; the term of the expert member is three years or until the end of the term of the Supervisory Board (term in parentheses).

Members of Supervisory Board Risk Management Committee:

Name and year of birth

Role

Education/degree(s)

Full-time position, job title

Ola Eklund, 1952

Chair

M. Eng.

Managing Director, Wintem-Agency Oy

Arto Ylimartimo, 1959

Vice Chair

M.Sc. (Econ. & Bus. Adm.), Authorised public accountant

Proventia Group Oy, Chair of the Board

Tiina Bäckman, 1959

Member

Senior Lawyer

Rautaruukki Pension Fund, Chair of the Board of Directors

Petri Sahlström, 1971

Member

D.Sc. (Econ. & Bus. Adm.)

Dean, University of Oulu, Oulu Business School

Tuomas Kupsala, 1967

Expert member (2017–2018)

M.Sc. (Econ. & Bus. Adm.), eMBA

Managing Director, Korpilahden Osuuspankki

Juha Luomala, 1963

Expert member (2017–2020)

M.Sc. (Econ. & Bus. Adm.), LKV (authorised real estate agent)

Managing Director, Valkeakosken Osuuspankki

Olli Näsi, 1963

Expert member (2017–2018)

LL.M, Trained on the bench,
eMBA

Managing Director, Satakunnan Osuuspankki

Members are annually elected at the regrouping meeting of the Supervisory Board following the Annual Cooperative Meeting; the term of the expert member is three years or until the end of the term of the Supervisory Board (term in parentheses).

Members of OP Financial Group Remuneration Committee:

Name and year of birth

Role

Education/degree(s)

Full-time position, job title

Jaakko Pehkonen, 1960

Chair

D.Sc. (Econ. & Bus. Adm.)

Professor of Economics, University of Jyväskylä 

Mervi Väisänen, 1963

Vice Chair

M.Sc. (Econ. & Bus. Adm.)

Senior lecturer in marketing, Kajaani University of Applied Sciences

Taija Jurmu, 1976

Member

Master of Laws, Degree of Bar

Deputy Director, Lapland Chamber of Commerce

Annukka Nikola, 1960

Member

M.SC. (Econ. & Bus. Adm.),
M.Sc. (Econ.)

Director, Administration, Konehuone Oy

Seppo Kietäväinen, 1959

Member 

M.Sc.(Agric.)

 

Members are annually elected at the regrouping meeting of the Supervisory Board following the Annual Cooperative Meeting.

Members of the central cooperative consolidated management Nomination Committee:

Name and year of birth Role Education/degree(s) Full-time position, job title

Jaakko Pehkonen, 1960 

Chair

D.Sc. (Econ. & Bus. Adm.)

Professor of Economics, University of Jyväskylä

Mervi Väisänen, 1963 

Vice Chair

M.Sc. (Econ. & Bus. Adm.)

Senior lecturer in marketing, Kajaani University of Applied Sciences

Taija Jurmu, 1976

Member

Master of Laws, Degree of Bar

Deputy Director, Lapland Chamber of Commerce

Annukka Nikola, 1960

Member

M.Sc. (Econ. & Bus. Adm.), M.Sc. (Econ.)

Director, Administration, Konehuone Oy

Members are annually elected at the regrouping meeting of the Supervisory Board following the Annual Cooperative Meeting.

 

 

 

Executive Board

 

Executive Board

Reijo Karhinen, OP Financial Group’s President and Executive Chairman since 2007, retired at the end of January 2018, based on his executive contract. On 20 September 2017, the Supervisory Board of OP Financial Group's central cooperative appointed Timo Ritakallio, 55, OP Financial Group's new President and Group Executive Chairman. He will take up his new duties on 1 March 2018. Tony Vepsäläinen, Deputy to President and Group Executive Chairman and Chair of the Executive Board, will act as President and Group Executive Chairman between the time when Karhinen retires and the time when Timo Ritakallio takes up his duties as the new President and Group Executive Chairman.

 

 
 
  • Tony Vepsäläinen
  • Karri Alameri
  • Carina Geber-Teir
  • Jari Himanen
  • Olli Lehtilä
  • Harri Luhtala
  • Harri Nummela
  • Erik Palmén
  • Jouko Pölönen
  • Outi Taivainen
  • Leena Kallasvuo
 

Tony Vepsäläinen, b. 1959

Executive Vice President, Operations, deputy to President and Group Executive Chairman

Chair
Member of the Executive Board since 2006
LL.M, eMBA

Relevant previous experience:

OP-Pohjola Group Central Cooperative: Chief Business Development Officer 2011–2014
OP-Pohjola Group Central Cooperative: Managing Director 2007–2010
Tampereen Seudun Osuuspankki: Managing Director 1998–2006
Turun Seudun Osuuspankki: Deputy Managing Director 1996–1998
Kuopion Osuuspankki: Bank Manager 1993–1996
Suomen Säästöpankki SSP Oy, Deputy to Area Manager 1992–1993
Pohjois-Savon Säästöpankki: managerial duties 1985–1992

Other relevant positions:

Service Sector Employers Palta: member of the Board and its Executive Committee
Automatia Pankkiautomaatit Oy: Chair of the Board of Directors
Housing Fair Finland Co-op: Member of the Supervisory Board

 

Karri Alameri, b. 1963

Executive Vice President, Wealth Management

Member of the Executive Board since 2015
M.Sc. (Econ. & Bus. Adm.), CEFA

Relevant previous experience:

OP Cooperative: Executive Vice President, Wealth Management, Investment
Pohjola Asset Management Ltd: President 2012-2014
OP-Pohjola Group Central Cooperative: Executive Vice President, Wealth Management 2013–2014
OP Life Assurance Company Ltd: Deputy CEO, Chief Investment Officer 2009–2012
Danske Capital, Sampo Bank plc: Deputy CEO 2007–2008
Mandatum Asset Management Ltd: Deputy CEO 2004–2006
Carnegie Asset Management Finland Ltd: Chief Investment Officer 1997–2003

Other relevant positions:

Access Capital Partners Group SA: Board member
Cinia Group Ltd: Member of the Board of Directors

 

Carina Geber-Teir, b. 1972

Executive Vice President, Customer Experience and Communications

Member of the Executive Board since 2009
M.Soc.Sc.

Relevant previous experience:

Varma Mutual Pension Insurance Company: Communications Director 2002–2009

Other relevant positions:

Yle, Finnish Broadcasting Company: Member of the Board of Directors
Unico Banking Group: Member of the Communication Committee

 

Jari Himanen, b. 1962

Executive Vice President, Group Steering and Customer Relationships

Member of the Executive Board since 2014
Diploma in Business and Administration, eMBA

Relevant previous experience:

Etelä-Karjalan Osuuspankki: Managing Director 2009–2014
OP-Pohjola Group Central Cooperative: Bank Manager, Sales channels and sales support 2007–2009
OP-Pohjola Group Central Cooperative: Bank Manager, Member bank steering 2002–2006
Kuusamon Osuuspankki: Managing Director 1997–2001
Pohjolan Osuuspankki: Bank Manager 1994–1997
Iisalmen Osuuspankki: Bank Manager 1989–1994
Etelä-Savon Osuuspankki: Bank Manager 1986–1989
Koillis-Savon Osuuspankki: Credit Manager 1985–1986

Other relevant positions:

 

Olli Lehtilä, b. 1962

Executive Vice President, Non-life Insurance

Member of the Executive Board since 2014
M.Sc. (Agr. & For.), eMBA

Relevant previous experience:

Helsinki OP Bank Plc: Managing Director 2011–2014
Tampereen Seudun Osuuspankki: Managing Director 2006–2010, deputy Managing Director 1999–2006
Päijät-Hämeen Osuuspankki: Bank Manager, Corporate Banking 1997–1998
Postipankki Oy: various managerial and expert duties 1993–1997
Suomen Säästöpankki - SSP Oy: various managerial duties 1992–1993
Sp-Palvelu Oy: Management Trainee 1990–1992

Other relevant positions:

Helsinki Region Chamber of Commerce: Member of the Delegation
Ilmarinen Mutual Pension Insurance Company: Member of the Board of Directors
Pellervo Economic Research PTT: Member of the Board of Directors
Unico Banking Group: Member of the Bancassurance Committee

 

Harri Luhtala, b. 1965

Chief Financial Officer

Member of the Executive Board since 2007
M.Sc. (Econ. & Bus. Adm.)

Relevant previous experience:

OP-Pohjola Group: various expert and managerial duties 1989–2007

Other relevant positions:

VTS Fund: Chair of the Board of Directors
Financial Stability Fund: Member of the Board of Directors
Confederation of Finnish Industries (EK): Member of Finance and Tax Commission

 

Harri Nummela, b. 1968

Executive Vice President, Digital Business and New Businesses

Member of the Executive Board since 2014, and previously between 2007 and 2010
LL.M, eMBA

Relevant previous experience:

OP Cooperative: Executive Vice President, Wealth Management 2014–2015
OP-Services Ltd: Chief Executive Officer 2011–2014
OP-Pohjola Group Central Cooperative: Member of the Executive Board; Executive Vice President, Banking and Investment Business 2007–2010; Department Manager 1998–2006
OP Fund Management Company Ltd: Managing Director 1997–2006
Tampereen Seudun Osuuspankki: Department Manager 1992–1997

Other relevant positions:

Service Sector Employers Palta: Member of the Economic Policy Committee
Finnish Ice Hockey Association: Chair

 

Erik Palmén, b. 1959

Chief Risk Officer

Member of the Executive Board since 2010
M.Sc. (Econ. & Bus. Adm.), M.Sc. (Eng.)

Relevant previous experience:

Nordea Bank Finland Plc: various expert and managerial duties 1987–2009

Other relevant positions:

VTS Fund: Vice Chair of the Delegation
Investors' Compensation Fund: Chair
Unico Banking Group: Member of the Country Risks Managers Committee

 

Jouko Pölönen, b. 1970

Executive Vice President, Banking

Member of the Executive Board since 2014
M.Sc. (Econ. & Bus. Adm.), eMBA

Relevant previous experience:

Helsinki Area Cooperative Bank (formerly Helsinki OP Bank plc): Managing Director since 2014
OP Corporate Bank plc (formerly Pohjola Bank plc): President and CEO since 2013
Pohjola Insurance Ltd: President 2010–2014
CFO 2009–2010 and CRO 2001–2008
PricewaterhouseCoopers: Authorised Public Accountant 1999–2001 and auditor 1993–1999

Other relevant positions:

 

Outi Taivainen, b. 1968

Executive Vice President, Human Resources

Member of the Executive Board since 2015
M.Sc. (Econ. & Bus. Adm.)

Relevant previous experience:

Kone Corporation: Head of HR, Central and North Europe 2012-2015
HR House Oy: Managing Director 2009-2011
Nokia Corporation: Various executive and expert duties 1993–2008

Other relevant positions:

Confederation of Finnish Industries EK: Member of the Skilled Workforce Committee
Service Sector Employers Palta: Member of the Labour Market Committee
Unico Banking Group: Member of the HR Committee

 

Leena Kallasvuo, b. 1956

Chief Audit Executive

Attending Executive Board meetings since 2010
M.Sc. (Econ. & Bus. Adm.)

Relevant previous experience:

Financial Supervisory Authority (Financial Supervision Authority), various expert and managerial duties 2005–2010
Trema Finland Oy: Project Manager 2000–2005
Aktia Savings Bank: Head of Department 1997–2000
Säästöpankkien Keskus-Osake-Pankki: various expert and managerial duties 1983–1996

Other relevant positions:

 

 

 

Risk Management

 

Risk Management

OP Financial Group’s operations are based on cooperative values, a strong capital base and capable risk management. OP Financial Group’s mission and core values as well as strategic and financial targets form the basis for risk management.

Risk management helps to achieve the targets set in the strategy by controlling that risks are proportional to risk capacity. In the long term within moderate risk-taking, the Group seeks above-market-average growth. This requires controlled risk-taking relying on strong risk management.

Integral part of daily business and corporate culture

Risk management is part and parcel of daily business and its management. Risk awareness and a moderate risk-taking approach are reflected in every business decision and form an integral part of corporate culture. OP manages customer relationships on a long-term basis and responsibly from the perspective of risk management.

An example of the role of risk management in Banking is that a borrower’s repayment capacity is a key prerequisite for loan approval. Robust risk management is in the interests of both customers and OP Financial Group.

A major player faces a variety of risks

Risks associated with OP Financial Group’s business segments differ in terms of weight. Credit risks, structural interest rate and funding risks and funding liquidity risks play a major role in Banking. Meanwhile, interest rate and other market risks are highlighted in Non-life Insurance and life insurance market risks in Wealth Management. As services go digital, operational risks and the resulting escalating reputational risks are highlighted in all businesses, including new businesses. With regulation becoming more complex and supervision tightening, compliance risk management is highlighted in all business segments.

The extent of OP Financial Group provides significant risk diversification benefits. Meanwhile, however, the role of various concentration risks will increase.

According to its strategy, OP will invest in creating new types of service packages and business models in the years to come. Before the company launches any products or services or adopts new operating models or systems, it assesses their risks using procedures as laid down by the central cooperative’s Risk Management. OP Financial Group offers only products to customers and applies business models that have been approved at Group level.

The significant business risks affecting OP Financial Group and their most common management tools are detailed in the table below.

Strategic risks

  Risk description Risk management tool
Strategic risks

Risk caused by changes in the competitive environment, slow reaction to changes in the business environment or customer behaviour, poor choice of strategy or poor strategy implementation.

The Group assesses strategic risks as part of the strategy process while identifying related control measures and assessing their effects, for example, on the Group’s overall risk exposure and economic capital requirement. The Group takes account of risks associated with its operating environment by implementing proactive risk management and systematically monitoring its operating and competitive environment. Strategic risk is reduced by regular planning, based on analyses and forecasts of customer future needs, developments in different sectors and market areas, and of competition.

Operational risks

Risk of financial loss or other detrimental consequences caused by inadequate or failed processes, inadequate or flawed procedures or systems or some external factor. Operational risks also include ICT, security, data security, procedural and model risks.

The key area of operational risk management involves identifying and assessing risks and assessing the effectiveness and adequacy of risk control and management tools. Risks that may disrupt business continuity are prepared against by means of business continuity planning in key business divisions.

Compliance risk

Risks caused by non-compliance with external regulation, internal policies, appropriate procedures or ethical principles governing customer relationships.

Managing compliance risks forms part of internal control and good corporate governance practices and, as such, an integral part of business management duties and the corporate culture. Compliance risk management tools include monitoring legislative developments, providing the organisation concerned with guidelines, training and consultation in respect of observing practices based on regulation as well as supervising the regulatory compliance with procedures applied within the organisation.

Reputational risk

Risk of deterioration of reputation or trust caused by negative publicity or realisation of some other risk.

The Group manages reputational risk proactively and on a long-term basis by complying with
regulation, good practices in the financial sector and OP’s principles of good business practice
and by highlighting the transparency of operations and communication. OP adheres to international financial, social and environmental responsibility principles and international commitments.

Credit risks

The Group manages reputational risk proactively and on a long-term basis by complying with
regulation, good practices in the financial sector and OP’s principles of good business practice and by highlighting the transparency of operations and communication.

Credit risk management in banking is based on active customer relationship management, good knowledge of customers, strong professional skills and comprehensive documentation. The day-to-day credit approval process and its effectiveness play a key role in the management of credit risks. OP Financial Group mitigates credit risks by using collateral, financial covenants, central counterparty clearing, netting agreements and exchange-traded products.

Market risks

Risk of loss resulting from interest rate, price, volatility and market liquidity changes in the financial market. Market risks consist of structural market risk associated with the balance sheet (market risks associated with the banking book and insurance liabilities) and market risks associated with trading and long-term investment.

Banking interest rate risk is managed by reducing the difference between floating rate receivables and liabilities as well as through limits and control limits. Moreover, derivatives may be used for hedging purposes.

Managing investment risks is based on diversification through effective allocation. Risks are managed through limits (e.g. VaR limits, allocation, credit rating and country risk limits) and investment plans.

Insurance companies manage market risks associated with investment and insurance liabilities by means of various investment instruments and derivative contracts.

VaR limits are used to limit market risks associated with trading.

Liquidity risks

Liquidity risk comprises funding liquidity risk, structural funding risk and funding concentration risk. Funding liquidity risk refers to the risk that OP Financial Group will not be able to meet its current and future cash flows and collateral needs, both expected and unexpected, without affecting its daily operations or overall financial position.
Structural funding risk refers to uncertainty related to long-term lending, arising from the refinancing risk due to the structure of funding. Funding concentration risk refers to the risk that funding becomes more difficult due, for example, to a transaction related to an individual counterparty, currency, instrument or maturity band.

OP Financial Group manages its liquidity position through the proactive planning of the funding structure, target levels, the monitoring of the liquidity status and a well-balanced liquidity buffer, planning and management of daily liquidity, the business continuity and contingency plan based on emergency preparedness, as well as the effective and ongoing control of the Group’s liquidity status. 

Non-life Insurance risks

Non-life Insurance risks comprise risk of loss or damage, and provision risk. Risk of loss or damage occurs when there are an above-average number of losses or they are exceptionally large. Provision risk arises when the claims incurred due to already-occurred losses are higher than anticipated on the balance sheet date.

Risk selection and pricing, the acquisition of reinsurance cover, the monitoring of claims expenditure and the analysis of insurance liabilities are highlighted in underwriting risk management. 

Life insurance risks

Life Insurance risks comprise biometric risks, cost risk and customer behaviour risks.
Biometric risks occur when claims paid out are higher than expected or for a longer period than expected. Customer behaviour risk means early termination of insurance premium payment or the insurance contract or its change on the basis of the option included in the contract. Expense risk refers to a situation in which incurred insurance contract management expenses differ from those estimated in rating.

Life Insurance underwriting risk management tools include prudent premium rating, careful selection of exposure and reinsurance. Diversifying insurance between different insurance types also reduces risks. Life Insurance reinsures, when necessary, any major individual risks and risk concentrations.
Customer behaviour risk is managed by means of a competitive product range, suitable product structures and incentives and sanctions in the insurance terms and conditions.

Concentration risks

Risks that may arise of a business’s excessive concentration on individual customers, products, lines of business, maturity periods or geographical areas.

The management of concentration risks is closely integrated with other risk management, with the related tools including limits, maximum allocations, diversification and economic capital requirement.

In-depth customer knowledge as the core of risk management

OP Financial Group’s risk management is based on three lines of defence. The first line consists of risk management integrated into business and other operations. It controls risk decisions and monitors risk exposure. Customer knowledge acquired through active customer relationship management ensures that risk-taking is moderate and guarantees the prerequisites for successful risk management.

The second line of defence consists of risk management independent of operational business organisations. In charge of general risks management conditions within OP Financial Group, it controls, supports and supervises the implementation of the risk management principles, confirmed by the Supervisory Board, at OP Financial Group and its entities.

The third line of defence involves centralised Internal Audit, which audits and assesses risk management performed by both the central cooperative and member entities.