• Articles of association
• General meeting of shareholders
• Election committee
• Board of Directors
• Committees of the board of directors
• Management
• Auditors
• Internal control
• Review by auditors
• Ethical guidelines
• Risk analysis
  • Strategic risks associated with market and industry
  • Operational risks
  • Financial risks

Financial risks

Exchange rate fluctuations

A major portion of the Group’s purchases are made in foreign currency, while sales are in local currency in the countries where the Group conducts business. The Group’s large net outflow currencies are EUR, USD and NTD (Taiwan dollar), while large net inflows are denominated in SEK and NOK. In an effort to reduce the exposure to exchange rate fluctuations, foreign exchange forward contracts are concluded for parts of the expected outflows and inflows for a period that corresponds to the period of time during which the current price list remains in effect. Large exchange-rate changes in important currencies can thus have short-term effects on the Group’s earnings. In the long term, the Group seeks competitive comprehensive solutions in the market where the currency is just one of many parameters.

Interest-rate changes

The Group’s borrowing and lending is managed on market terms. Derivate instruments are used to hedge future interest levels on the Group’s borrowing. A portion of the Group’s liabilities pertain to defined-benefit pension plans financed through the PRI system. The interest rate for PRI liabilities is a factor of uncertainty.
For more detailed information about financial risks and risk management, refer to Note 31 on pages 80–82 in the Annual Report 2009/2010.