Board of Directors´ Report

Corporate Governance of Metsähallitus

Metsähallitus has posted a description, approved by the Board of Directors, of its corporate governance on its website. The description outlines matters such as Metsähallitus’ legal status, the Group's basic structure, ownership steering, the steering of public administration duties, the Board of Directors, the Management Group, remuneration, internal supervision, auditing and external audit functions, and communications.


Metsähallitus draws up a separate responsibility report as part of its Annual Report.

Risk management and key risks

The goal of Metsähallitus' risk management is to ensure the achievement of set targets, the fulfilment of legal obligations and operational continuity. Metsähallitus takes a moderate stance on risk-taking. The significance of risks is assessed as a combination of the probability and impact of any given incident. Risks are divided into strategic, operational and economic risks, and the risk of damage. Risks are managed using a systematic risk management process. An estimate of the established targets and our own position form the basis of the risk management process. Risks are related to existing objectives and future possibilities.

Metsähallitus' Board of Directors approves the risk management policy and assesses the need to amend the policy on an annual basis. Each year, the Board of Directors receives a progress report on Metsähallitus’ risks and their management. The audit committee assists the Board in monitoring risk management. The Managing Director bears overall responsibility for risk management. Risks are managed where they arise. Managers of profit units and subsidiaries are in charge of risk management within their unit/company. The chief financial officer is in charge of the risk management process and control of risk management. The head of risk management at Metsähallitus is in charge of the coordination, development, guidance and reporting models associated with risk management, as well as supporting risk management within the organisation.

Key risks in terms of achieving Metsähallitus' goals include the development of timber and property prices and sales; the quantity and value of land areas in commercial forestry remaining at the level required by the goals set; and the balance of tasks and funding of Parks & Wildlife Finland. The time required for wind power projects permit procedures may delay the progress of such projects. The effectiveness of developing new products and services and maintaining a good reputation influence the attainment of objectives. General appreciation of Metsähallitus' activities has an impact on the operating conditions for recreational activities, conservation efforts and forestry. Further risks that may affect operational activities include natural conditions and uncertainties in the operation of information systems. The success of development projects in progress has an effect on the attainment of objectives.

Metsähallitus manages about a third of Finland's land area. Metsähallitus maintains information on risks related to contaminated sites. These risks are classified as primary and secondary responsibilities in accordance with the related legislation. Metsähallitus mainly bears secondary responsibility. The statement on contaminated soils is updated on a regular basis. The most recent statement was drawn up in 2016.