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General notes:
HIGHLIGHTS FOR 2010
- Revisited our risk operating model to ensure we support the business while maintaining the independence and authority to review and challenge management decisions.
- Increased analysis of various categories of risk across divisions and regions.
- Improved capability and simplified systems and processes to sharpen our focus on risk analysis, thus providing valuable insights for business management and decision making.
- A clearly articulated risk appetite that is integrated with the strategic planning process and helps to ensure our risk posture is within agreed parameters.
- Enhanced use of scenario planning and stress testing to help plan and prepare for future events that could have an impact on our organisation, particularly in volatile environments.
- Collaboration with the businesses on the streamlining of credit policies and processes, and working with technology to build a platform for sound business information, insight and decision making across the enterprise.
At NAB, the risk management function aims to enable sustainable business performance by building and delivering strong risk capability, risk management and risk controls.
It's a challenging task, given an environment characterised by increased consumer and regulatory interest, with a much stronger lens on risk management and risk culture, and heightened sensitivity to and awareness of funding, liquidity and the broad spectrum of risk. The challenge for Risk is to have the capacity and flexibility to support our business, while delivering on our strategic priorities and a ramped-up regulatory change agenda.
OUR PRIORITIES
Our strategic priorities align with and support the Group's strategy. They:
- Make risk easier. By simplifying and streamlining policies, processes, procedures and reporting.
- Enable a culture for success. The calibre and engagement of our people is critical to ensuring effective risk management and a resilient risk culture. To do this, we provide our people with the support, skills and opportunities needed to build great banking careers.
- Build quality engagement with business partners. By clearly defining our operations and engagement models and ensuring sound risk frameworks to support the business.
- Make risk insightful. Through strong knowledge management practices, enhanced scenario analysis capabilities, and further embedding the organisation's risk appetite.
OUR APPROACH TO RISK MANAGEMENT
As well as maintaining oversight of our key risks at an enterprise level, our risk management capability is integrated into the day-to-day activities of our businesses.
Within every business, we have a Chief Risk Officer (CRO) who reports to both the Group CRO and the relevant Group Executive. The CROs sit on their individual leadership teams and provide objective risk management advice. We manage risk through the application of the Group Risk Inventory (GRI), which consists of our most significant risks.
The Risk Leadership Team and Group Risk Management Committee (GRMC) review the GRI annually. The GRMC, chaired by the Group CEO and made up of senior executives, is the principal risk strategy and policy decision-making management body for the business. The Board Risk Committee oversees the risk management framework and risk profile.