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Whet Your Risk Appetite – What Boards Need To Know Abacus Conference 24 th September 2012.

Whet Your Risk Appetite – What Boards Need To Know Abacus Conference 24 th September 2012. Background. W orld change R egulation and regulatory oversight R ecent experience: JP Morgan Barclays HSBC Lend Lease Macquarie Bank R ole of Director needs to evolve, but ‘how ’?.

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Whet Your Risk Appetite – What Boards Need To Know Abacus Conference 24 th September 2012.

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  1. Whet Your Risk Appetite - What Boards Need To Know Whet Your Risk Appetite – What Boards Need To Know Abacus Conference 24th September 2012.

  2. Whet Your Risk Appetite - What Boards Need To Know Background • World change • Regulation and regulatory oversight • Recent experience: • JP Morgan • Barclays • HSBC • Lend Lease • Macquarie Bank • Role of Director needs to evolve, but ‘how’?

  3. Whet Your Risk Appetite - What Boards Need To Know Myaim today is: • Recent experience • Two differing approaches • Culture • Conclusions

  4. Whet Your Risk Appetite - What Boards Need To Know Recent Experience • Expected losses • Unexpected losses

  5. Whet Your Risk Appetite - What Boards Need To Know

  6. Whet Your Risk Appetite - What Boards Need To Know

  7. Whet Your Risk Appetite - What Boards Need To Know Writings on Loss Management • COSO • Enterprise Risk Management • A natural consequence of taking risk

  8. Whet Your Risk Appetite - What Boards Need To Know Two Different Approaches Three Lines of Defence Compliance Approach: • Tick the boxes Judgment Approach: • Experienced people • Culture • Reward & motivation

  9. Whet Your Risk Appetite - What Boards Need To Know Organisation Culture • Binds people to a common mission and objectives • Binds people to adherence to common values, ethics and behaviours • Whole of organisationculture, not risk culture • Centrality of Boards • Board oversight

  10. Whet Your Risk Appetite - What Boards Need To Know Questions for Directors • Strategy and risk appetite • Reporting of the business results • Test embedding • Remuneration

  11. Whet Your Risk Appetite - What Boards Need To Know Directors Approach • Up to date • Dumb questions • Pursue • Ask what could go wrong • Data vs information

  12. Whet Your Risk Appetite - What Boards Need To Know Gaps • Data v judgement • Process v experience • Risk v reward • Fear v greed • Compliance v intuition • People v process • Independence v collaboration

  13. Whet Your Risk Appetite - What Boards Need To Know Strategic Issues for the Mutual Sector • Unexpected losses in the US • Where to grow • What can go wrong?

  14. Whet Your Risk Appetite - What Boards Need To Know • Our People: • Bruce Auty – Principal • Michael Hamar – Principal • Andrew Williamson – Director • Bruce Hills – Director • Peter Ewers – Risk Consultant brucea@theriskboard.com.au michaelh@theriskboard.com.au andreww@theriskboard.com.au bruceh@theriskboard.com.au petere@theriskboard.com.au

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