Risks and risk management
RJ's investment policy, adopted by the Board, lays down the emphasis of investments, limits to investment risks, approved financial instruments, return targets and ethical guidelines.
Within the framework of the investment policy and decisions on such matters as the reference portfolio made by the Finance Committee, investment decisions are delegated to the Finance Department, which is headed by the foundation's Finance Director.
All securities are kept in safe custody in a Swedish bank. Financial administration, which is separate from asset management, comprises the Controller and Back Office functions.
Every year, RJ sets up a financial sustainability test ('stress test') to assess the impact on the foundation's future dividend capacity that would result from a scenario involving a sharp fall in asset value. Investment risks can be classified among the following risk factors:
- Market risks, including stockmarket, property, currency, interest-rate and hedge-fund risks
- Credit risks, including counterparty risks
- Liquidity risks