Our risk management framework provides a uniform governance structure for the identification and management of risks from the Board to business unit level.

Our risk management structure

ANZ’s Board has ultimate responsibility for risk and crisis management and four Board level committees support the Board in managing business risk:  

The Risk Committee

Assists the Board of Directors in the effective fulfilment of responsibilities for business, market, credit, equity and other investment, financial, operational, liquidity and reputational (including social and environmental) risk management. Meets at least four times annually.

The Audit Committee

Reviews financial reporting principles and policies, controls and procedures; and the effectiveness of ANZ's internal control and risk management framework. Meets at least four times annually.

The Governance Committee

Reviews and approves all ANZ governance policies and principles, and ensures an appropriate Board and Committee structure is in place. Meets at least twice annually.

The Human Resources Committee

Monitors remuneration related risks and improves assurance by liaising with Audit and/or Risk Committee to ensure that executive and employee remuneration risks and controls are reviewed, updated and linked to the corporate risk strategy and assurance program. Meets at least four times annually.

The Board Committees are supported by the Chief Risk Officer and executive management committees, and are responsible for co-ordinating risk matters for each area of risk management including; Capital Management Policy Committee; Corporate Sustainability and Diversity Committee; Credit & Market Risk Committee; Credit Ratings System Oversight Committee; Global Anti-Money Laundering/Sanctions Committee; Group Asset & Liability Committee; NZ Asset & Liability Committee; NZ Branch Asset & Liability Committee; NZ Executive Risk Management Committee; NZ Operational Risk Executive Committee; NZ Project Initiative Review Committee; Operating Risk Executive Committee; Project Investment Review Committee and Reputation Risk Committee and  Valuations Committee.

We also have executive management committees in each geographic region.

An independent risk management function oversees activities such as risk measurement, reporting and portfolio management. The risk function provides ANZ Management Board with a monthly report describing the external environment (e.g. interest rates), together with emerging threats (e.g. risk assessments) and opportunities (including management strategies) and status updates (e.g. outstanding audit issues) on current issues.

Our Internal Audit function evaluates and provides advice on how to improve the effectiveness of ANZ’s operations, including our risk management processes. Internal Audit reports to the Board’s Risk Committee each quarter and our Chief Risk Officer attends the Audit Committee twice a year to report on the effectiveness of the risk management framework and any material issues.

Risk is everyone's responsibility

To maintain a strong risk management culture that is consistent with our organisational value of accountability, we expect every ANZ employee to be responsible for risk management. This includes embedding our risk management principles and approach into all staff communications that we develop.

Risk management training programs that have previously been provided to staff included:

  • Our Building Bankers program promotes the concept that understanding and managing risk is everyone’s responsibility. While our employees have different roles and expertise, everyone is responsible for making conscious decisions that manage risks with moral and commercial integrity, in a manner that enhances our reputation with stakeholders. It incorporates learning programs for our staff including:
  • Leading Risk in our World: a program designed to improve our executive leader’s risk management behaviours and skills (such as questioning and communicating); which further enhances leader’s ability to incorporate risk management in their daily activities. It highlights the importance of information flows, a key factor in well governed and successful organisations.
  • Understanding Risk in our World: a program designed for all employees to help them understand the risks associated with their daily decisions and provide them with the tools to help them manage their risks.

Within these programs, employees were encouraged to apply a precautionary approach to managing risk, using the ‘STARS’ principles to guide conscious and ethical decision making:

  • Stand back
  • Think
  • Ask
  • Resolve
  • Self-check
Managing reputation risk

ANZ has a clear framework for managing reputation, social and environmental risks.

Our Reputation Risk Policy helps employees identify the day-to-day issues that can impact ANZ’s reputation. The policy highlights decisions that are particularly important to ANZ’s reputation, like designing or approving a product, lending money to a new client or entering a joint venture with a third party.

The Reputation Risk Committee and regional/division sub-committees support the implementation of the policy and provide a forum where employees can obtain advice on complex or controversial issues involving clients, transactions or products.

Reputation risk committee responsibilities

The Reputation Risk Committee is chaired by the Chief Risk Officer and is responsible for:

  • Understanding and assessing the impacts of current and emerging environmental, social, business and regulatory risks on ANZ’s portfolio to the extent they do or may have consequences for ANZ’s reputation
  • Approving appropriate strategies to manage and mitigate those reputation risks
  • Reviewing and assessing reputation risk matters escalated via the Divisions
  • Oversight of the Divisional governance processes in relation to reputation risk matters (including Divisional Risk Committees, Reputation Risk Committees and Product Approval Committees)
  • Considering any other strategic or business matter and initiatives with the potential to impact ANZ’s reputation not already covered by Divisional Risk Committees or as directed by the Divisional CEOs.

Business unit committees and risk functions have responsibility for identifying and managing the implications of their business on our reputation. For instance, the Asia Pacific Reputation Risk Committee oversees the development of strategies and policies to assist reputation risk management in our Asia Pacific operations and provides senior management guidance on controversial transactions.

Responsibility for managing reputation risk is further embedded at the highest levels of the bank, with a proportion of our most senior executives’ remuneration dependent on effective management of economic, social and environmental risk issues.

We have developed a range of policies, processes, tools and initiatives to support employees in making balanced, informed and transparent risk decisions, and help improve the management of social and environmental risks and opportunities.

These include our Reputation Risk Radar which helps to identify, confirm and respond to social, environmental and governance issues involving an existing or prospective client at an early stage.

Our Corporate Sustainability and Diversity Committee monitors current and emerging corporate responsibility risks and opportunities and reports to ANZ's Management Board on response strategies.