Directors qualifications experience and special

DIRECTORS’ QUALIFICATIONS,
EXPERIENCE AND SPECIAL
RESPONSIBILITIES (continued)
COMPANY SECRETARIES’
QUALIFICATIONS AND EXPERIENCE
GOVERNANCE (continued)
36 ANZ 2018 ANNUAL REPORT

37 37

The material risks facing the group per the Group’s RMS, and how these risks are managed are summarised below:
Key Material Risks
Risk Type Description Managing the Risk
Capital
Adequacy
Risk
The risk of loss arising from the Group failing
to maintain the level of capital required
by prudential regulators and other key
stakeholders (shareholders, debt investors,
depositors, rating agencies, etc.) to support
ANZ’s consolidated operations and risk appetite.
We pursue an active approach to Capital Management through ongoing review,
and Board approval, of the level and composition of our capital base against key
policy objectives.
Compliance
Risk
The risk of failure to act in accordance with
laws, regulations, industry standards and
codes, internal policies and procedures and
principles of good governance as applicable
to ANZ’s businesses.
Key features of how we manage Compliance Risk as part of our Operational Risk
framework include:
• centralised management of key obligations, and emphasis on identifying
changes in regulations and the business environment, so as to enable us to
proactively assess emerging compliance risks and implement robust reporting
and certification processes.
• recognition of incident management as a separate element to enhance ANZ’s
ability to identify, manage and report on incidents/breaches in a timely manner.
• the Whistleblower Protection Policy allowing employees and contractors to make
confidential, anonymous submissions regarding concerns relating to accounting,
internal control, compliance, audit and other matters.
Credit
Risk
The risk of financial loss resulting from:
• a counterparty failing to fulfil its
obligations; or
• a decrease in credit quality of a
counterparty resulting in a financial loss.
Credit Risk incorporates the risks associated
with us lending to customers who could be
impacted by climate change or by changes
to laws, regulations, or other policies adopted
by governments or regulatory authorities,
including carbon pricing and climate change
adaptation or mitigation policies.
Our Credit Risk framework is top down, being defined by credit principles and
policies. Credit policies, requirements and procedures cover all aspects of the
credit life cycle — for example: transaction structuring, risk grading, initial approval,
ongoing management and problem debt management, as well as specialist
policy topics.
The success of the Group’s strategy is underpinned by our sound management of
the Group’s risks. All of the Group’s activities involve — to varying degrees — the
analysis, evaluation, acceptance and management of risks or combinations of risks.