HK Bourse: Announcement From Prudential Plc

 
    Following is the related link: 
http://www.hkexnews.hk/listedco/listconews/sehk/2016/0520/LTN20160520747.pdf 
 
Prudential plc 
 
Terms of Reference: Group Risk Committee 
 
1. Constitution and Purpose 
 
     a. The Committee is constituted by the Board of Directors with the purpose of assisting 
        the Board in providing leadership, direction and oversight of the Group's overall risk 
        appetite and risk tolerance, as well as the investment and risk management 
        frameworks. 
 
     b. The responsibility and authority of the Committee covers the whole of the Group's 
        business. 
 
     c. Where there is a perceived overlap of responsibilities between the Group Audit 
        Committee and the Group Risk Committee, the respective committee chairmen will 
        have the discretion to agree the most appropriate committee to fulfil any obligation. 
 
2. Membership 
 
     The membership of the Committee is restricted to the independent Non-executive 
     Directors with a minimum of three members, one of whom should be a member of the 
     Group Audit Committee. The Chairman of the Board should not be a member. 
 
3. Meetings 
 
     a. The Committee will meet at least four times a year. 
 
     b. A quorum is two members of the Committee. 
 
     c. The Chairman of the Committee is responsible for reporting to the Board on the 
        Committee's activities. 
 
    d. The Committee may invite any individual, whether internal or external, to attend all or 
       part of any meeting in whatever capacity as the Chairman of the Committee deems 
       appropriate in order to assist the Committee in its duties. 
 
     e. The Group Chief Risk Officer shall attend meetings and the Committee will meet with 
        her, management and other invitees as necessary, where appropriate without the 
        presence of the Executives. 
 
     f. The Chairman or Committee members may convene additional meetings at any time to 
        deal with matters within the remit of the Committee. The Group Chief Risk Officer or 
        Group Investment Director may also request a meeting if either considers it necessary. 
 
     g. The Group Company Secretary, or his nominee, is the Secretary of the Committee and 
        will minute the proceedings and retain copies of the papers. 
 
 
 
 
                                         Page 1 of 4 
Prudential plc                                                Terms of Reference: Group Risk Committee 
                                                              Approved by the Board on 18 May 2016 
 
4. Duties 
 
The Committee is authorised to investigate any matter within its remit, seek any information 
from any of the Group's Directors and/or employees which is necessary to enable it to 
satisfactorily discharge its duties and make recommendations to the Board where action or 
improvement is needed. 
 
The Committee is responsible for: 
 
i)    Group Risk Framework 
 
      a. recommending the Group's overall risk appetite and tolerance to the Board for 
         approval; 
 
      b. reviewing the Group's risk framework and approving risk policies, standards and limits 
         within the overall appetite and tolerance approved by the Board; 
 
      c. reviewing and approving the Group's Compliance policies; 
 
      d. reviewing the Group's processes for determining risk appetite tolerance, monitoring 
         compliance with approved risk tolerance levels and policies and the resultant action in 
         respect of policy breaches; 
 
      e. reviewing the Group's material risk exposures, including market, credit, insurance, 
         operational, regulatory, customer/conduct, liquidity and economic and regulatory 
         capital risks against the Group's risk methodologies and management's actions to 
         monitor and control such exposures; 
 
      f. annually reviewing and approving the Group's key risks; 
 
      g. reviewing the Group's stress testing and monitoring management's response to the 
         results; 
 
      h. receiving notification of material breaches of risk limits and approving the proposed 
         remedial action where such cases are escalated to the Committee by the Group Chief 
         Risk Officer; 
 
      i.   receiving reports and recommendations from the Executives and the Group Executive 
           Risk Committee on the Group's attitude to and tolerance of risk, including financial and 
           non-financial risks; 
 
      j.   reviewing and providing confirmation to the Group Audit Committee that, to the best 
           of the Committee's belief, the disclosures made in the Annual Report on its activities, 
           the risk governance and related sections are fair, balanced and understandable; 
 
      k. liaising with the Group Audit Committee Chairman to determine on a case by case 
         basis which Committee takes responsibility for undertaking deep dive reviews and 
         keeping the Group Audit Committee updated on any relevant findings from reviews 
         requested by the Committee; 
 
 
                                           Page 2 of 4 
Prudential plc                                                  Terms of Reference: Group Risk Committee 
                                                                Approved by the Board on 18 May 2016 
 
 
 
 
 
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ii)   Risk models and measures 
 
      a. annually reviewing the overall effectiveness of the Internal Model; 
 
      b. reviewing the appropriateness of any proposed major change in the Internal Model, 
         and making recommendations to the Board as required; 
 
 
iii) Group Investment Framework 
 
       a. reviewing the Group's investment framework and approving investment policies, 
          standards and limits within the overall strategy approved by the Board; 
 
iv) Regulatory developments 
 
       a. reviewing emerging regulations and regulatory risks; 
 
       b. advising the Board on the implementation of regulations and regulatory changes; 
 
       c. reporting to the Board on regulatory events and visits, including those arising from 
          compliance oversight activities; 
 
v)    Strategy, business plans and disclosures 
 
      a. advising the Board on the risks inherent in strategic transactions and business plans; 
 
      b. advising the Board on the review of public and regulatory disclosures, such as the 
         annual Solvency and Financial Condition Report, the Own Risk and Solvency 
         Assessment when required and other reporting requiring material input from the 
         Group Risk function; 
 
vi) Remuneration 
 
       a. advising the Remuneration Committee on risk weightings to be applied to 
          performance objectives for Executive remuneration; 
 
vii) Group Chief Risk Officer 
 
      a. reviewing and monitoring management's responsiveness to the findings and 
         recommendations of the Group Chief Risk Officer; 
 
      b. reviewing and monitoring the effectiveness of the Group Chief Risk Officer. 
 
 
 
 
                                          Page 3 of 4 
Prudential plc                                                 Terms of Reference: Group Risk Committee 
                                                               Approved by the Board on 18 May 2016 
 
5. Governance 
 
The Committee will: 
 
     a. receive regular reporting from the Group Executive Risk Committee, Group Risk and 
        Prudential Capital, as well as reporting from the Group-wide Internal Audit Director in 
        relation to the findings of any reviews of the effectiveness of internal controls and risk 
        management systems, and which relate to matters falling within these terms of 
        reference; 
 
     b. ensure that the Chairman of the Committee is available to answer shareholder 
        questions at general meetings; 
 
     c. arrange for periodic reviews of its own performance and review its terms of reference, 
        recommending any changes it considers necessary to the Board for approval; 
 
6. Support 
 
The Committee will: 
 
    a. have access to sufficient resources in order to carry out its duties; 
 
     b. at the Company's expense and through the Group Company Secretary's office where 
        applicable, be able to select, appoint and agree the terms of appointment of any 
        advisers deemed appropriate by the Committee to provide advice to the Committee, 
        including those used by management provided no conflict of interest arises, and invite 
        such advisers to attend meetings to assist the Committee; 
 
     c. be provided with appropriate and timely training, both in the form of an induction 
        programme for new members an on an ongoing basis for all members. 
 
 
 
 
                                          Page 4 of 4 
Prudential plc                                                  Terms of Reference: Group Risk Committee 
                                                                Approved by the Board on 18 May 2016 
 
 
 
 
 
 
 
 
 
 
Source: Hong Kong Exchanges & Clearing