Ongoing risk management, control and follow-up
AP2’s CEO is responsible for ensuring that operations are conducted within the given framework and investment regulations, and that control and follow-up take place on a daily basis. In order to ensure the Fund’s risk management and control environment in a structured way, AP2 strives to work according to the principle of “Three Lines of Defence”.
Asset management, which according to the model is primarily considered to be the first line of defence, “owns the risk”, which means that the Fund’s asset management must manage the risks in the business. Furthermore, they have the delegated responsibility to implement the Fund’s adopted risk strategy and ensure that the Fund stays within the defined limits that apply by law, decided by the Board of Directors or that apply to the Fund’s operations through other decisions.
The second line of defence consists mainly of the Risk Management and Compliance functions, which independently monitor, control and report the Fund’s risks and how the Fund complies with internal and external regulations.
The third line of defence consists of an external independent internal audit function.