Risk management policy
The Board of Directors of Cdp Equity establishes its risk management policy, deciding the rules and guidelines for identifying, measuring, managing and monitoring the various risks to which Cdp Equity may be exposed in the course of its investment activities. This involves the assessment of financial, operating and reputational risk. Like all companies in the Cdp Group, Cdp Equity cannot acquire loss-making companies.
The policy sets a series of concentration limits, expressed in terms of maximum exposure per economic sector, individual investment, and investment size. The policy allows a maximum concentration per sector of 20% of the value of total assets. In addition, stricter limits apply depending on the risk profile of the investment. Cdp can only authorise an exception to these limits by adopting an amendment to risk policy rules.
The Compliance function monitors compliance risks across all aspects of the company’s operations. It therefore ensures that the company is on the “correct path” in its operations, by checking compliance with the objectives set out in its bylaws.
To perform this role, the Compliance function follows Internal Rules that define its responsibilities, powers and requirements. The Internal Rules also govern the planning of controls, identification and assessment of compliance risks, reporting, and benchmarking against corporate governance best practices. In essence, all of Cdp Equity’s decisions and actions are checked by Compliance, using standardised parameters that result in correct assessments even retrospectively and in changing scenarios.
Cdp Equity has procedures, guidelines, regulations and company policies that combine to ensure the framework is efficient and effective. The framework and company ethos are complemented by its Code of Ethics and Compliance System (Legislative Decree 231/2001).