The Risk Committee (RC) is established pursuant to Art. 13 para. 3 of the Articles of Association and the Art. 3 of the Organisational Rules to ensure that risks are identified, monitored and can be managed. In addition, the committee assists the Board in other duties related to the committee’s work as specified by the Board.
The Board has confirmed the central duties and operating principles of the committee in a written charter, the essential contents of which are presented below. The RC reports regularly on its work to the Board.
For the avoidance of doubt, given that the Company’s subsidiaries include Multitude Bank p.l.c, which is a credit institution licensed by the Malta Financial Service Authority, and also other public interest entities, such subsidiaries may have risk committees on their own.
The purpose of the committee is to assist the Board by preparing the committee-dedicated matters for the Board. The members of the committee must be sufficiently qualified to perform the responsibilities of the committee.
The members of the committee must have the specific experience, requisite knowledge, qualifications and competences, concerning risk management and control practices, which are individually and collectively required to understand and monitor group’s risks. A member of the committee may not participate in the day-to-day management of the Company or a company in the same group of companies. Furthermore, the majority of the members of the committee must be independent (within the meaning of the Swiss Code of Best Practice) of the Company. The Chairman of the Audit Committee shall be a member of the Risk Committee.
The Chairman is appointed by the Board among the non-executive members of the committee who are neither chair of the Board nor of any other committee.
In the end of the year 2024, the Risk Committee consisted of Marion Khüny (Chair), Kristiina Leppänen and Ari Tiukkanen. All members are independent of significant shareholders and Kristiina Leppänen and Marion Khüny are independent of the Company.
The RC meets at least four times each year or more frequently if deemed necessary or appropriate. During the year 2024, the RC had four meetings. The average duration of the meetings was 1 hour 48 minutes. Ari Tiukkanen attended all four meetings, and Marion Khüny attended all three meetings held after her appointment to the committee, resulting in a 100% participation rate for both. Kristiina Leppänen attended three out of four meetings, corresponding to a 75% participation rate.
The Chairman of the Board, who is also a member of the committee, attended all meetings in 2024. The CRO was present at all meetings. The CFO, CEO of Multitude Bank and Tribe CEO of Wholesale Banking were invited to selected meetings based on the agenda topics and attended one to three meetings during the year.
The committee shall, in particular:
- work with Multitude team members to establish and maintain a framework to:
(a) identify new and existing material risks pertaining to Multitude and its business;
(b) regularly classify, monitor, calibrate probability and severity of risks; and
(c) significant adjustments arising from the audit
The main risks which are covered by the oversight responsibilities include, but are not limited to credit, market, liquidity and operational risks, including ESG risks.
- advise and support the Board regarding the monitoring of the institution’s overall actual and future risk appetite and strategy, considering all types of risks, to ensure that they are in line with the business strategy, objectives, corporate culture and values of the institution;
- review new business opportunities and anticipating changes in the Group’s risk profile introduced by such new processes and projects or by other factors, and initiating actions to address them;
- report annually to the Audit Committee on risk management and compliance with laws and regulations;
- escalate to the Audit Committee any items that have a significant compliance or financial statement impact or require significant financial statement / regulatory disclosures;
- consider material risks, brought to its attention by the Chief Risk Officer, associated with offered financial products and services and take into consideration the alignment between the prices assigned to and the profits gained from those products and services;
- review recommendations made by the internal and external auditors, and by regulatory agencies with respect to the risk management activities of the Group, and management’s responses in relation to these recommendations, ensure that these reports are followed up accordingly;
- evaluate and report to the Board on, the Group’s risk profile and risk monitoring in particular, with respect to the following:
(a) performance against risk appetite, and approved risk type limits;
(b) risk trends;
(c) risk concentrations
(d) key risk indicators
- oversee policy implementation and monitoring compliance with policies; and
- consider the adequacy of resources required to perform the appropriate risk management duties.
The committee may also discuss other matters and duties appointed to it by the Board.