Risk Management
Active risk management plays a central role in NORDEN’s strategy to ensure stable earnings. The Company’s risk management efforts are aimed at minimising potential negative effects on earnings from the commercial and financial activities and to limit risks to acceptable levels.
The framework and objectives governing the commercial and financial risk management are set out and approved annually by the Board of Directors. The framework covers commercial risks, financial risks and capital management risks. The Board of Management is responsible for identifying material risks and developing the Company’s risk management efforts. Exposures and the utilisation of the framework are reported to the Board of Directors on a monthly basis.
NORDEN’s commercial and financial activities lead to exposure to a number of risks, the most material of which are risks in connection with fluctuations in freight rates and vessel prices and credit risks. In the following, the individual risks are examined in terms of their impact on the Company’s financial position and in terms of hedging the Company’s expected future earnings.
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