Waha Capital Annual Report 2015

Risk Management

Risk Management

Risk management is an integral part of our operations and permeates through every level of the organisation. The annual and on-going elements of the risk management process have been formalised, including the risk identification, assessment and monitoring processes. We place a strong emphasis on embedding a strong risk management culture through all aspects of our business.

Risk Management at Waha Capital

Waha Capital’s primary objective is to create long-term shareholder value by leveraging its expertise in managing investments, which necessarily involves undertaking financial risk. Therefore risk management is an integral part of our operations and permeates through every level of the organisation. The Board establishes the control environment, sets the risk appetite, and approves policies and delegates responsibilities under the company’s risk management framework.

How Risk Management fits into the Waha Capital organisation.

Our approach to the risk management process comprises of the following key components:

  • Identification and assessment of risk
  • Measurement of risk
  • Control of risk
  • Monitoring and reporting of risk.

Waha Capital strongly believes in a disciplined approach to managing risk and has actively fostered an organisation-wide culture of prudent risk management.

All risk management reviews, decisions and actions are based on an approved enterprise-wide risk management strategy framework supported by:

  • A documented risk management policy.
  • A comprehensive set of policies and procedures.
  • A risk governance structure incorporating sufficient built-in challenges, checks and balances.

Ultimate responsibility for setting risk appetite and the effective management of risk rests with the Board.

This is managed through a number of senior executive committees, primarily the Investment Committee and the Risk Committee, which ensure that risk taking authority and policies are cascaded down from the Board to the appropriate business units.

Risk Management framework at Waha Capital

Our risk management framework recognises that the long-term success of our company is contingent on our ability to effectively understand, accept and manage risk within our business

Our risk management framework includes:

  • A risk management policy which is communicated throughout the company and reviewed annually.
  • A standard set of key risk areas, categories and definitions.
  • A standardised and automated risk assessment and reporting tool, including standard risk assessment criteria, and the determination of our risk appetite.
  • Consolidation of risk assessments for each business at the company level to identify organisation-wide impacts and trends, which applies across both our Asset Management and Principal Investments businesses
  • A periodic risk assessment, action planning and reporting cycle, which includes a review of current and emerging risks and their mitigation by the Board, Investment Committee and the Risk Committee
  • Reporting to the Board on any matters which have arisen from the review of risk management and internal control processes and any exceptions to these processes.

Roles and responsibilities for risk management within Principal Investments and Asset Management are clearly defined at each level – the Investment Committee, the Risk Committee and Risk Management departments. The Investment Committee approves investments and reviews periodic investment activity reports. These reports summarise all investment activities, clearly illustrate investment portfolio risk and return, evaluate compliance with the investment policy and all risk limits, and list exceptions to internal policy and regulatory requirements.