Enterprise Risk Management Framework
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Overview
Risk is an inherent part of investing and therefore risk management is a very
important component of our business and in reaching our primary goal to
“…assist the plan sponsor in meeting the pension promise to
its members.”
In order to meet this pension promise NBIMC has based its investment policies on
the following two objectives:
- Maximize investment returns, and
- Protect accumulated assets
The NBIMC Board of Directors, as outlined in section 2.6 of their Terms of
Reference, is responsible for understanding the principal risk facing the
corporation and the systems that management has put in place to mitigate and
manage those risks as outlined in this document.
While each Board Committee supports the Board’s risk management oversight
in areas related to their specific mandate, the Audit Committee is specifically
assigned the task of assisting the Board in its oversight of risk management.
Our enterprise risk management framework has been put in place to integrate strong
corporate oversight with a series of well-defined independent risk management
systems and processes within the various NBIMC business teams. The process
involves the participation of the NBIMC Board, management, and external service
providers. An outline of the risk governance structure is provided in Appendix A.
The following document presents NBIMC’s philosophy and management of risk by
identifying:
- the types of risks faced by the corporation in its normal business operations and,
- what parties are accountable for monitoring each risk type, while also outlining
the means and timing through which we seek to measure and manage these risks.
An overall risk review is provided through the President’s Report at each quarterly
Board Meeting, and a more detailed review of this Risk Framework and related issues
is conducted annually by the Audit Committee and subsequently the Board.
The corporation believes that this system will significantly contribute to providing
the highest long-term risk adjusted returns possible to meet the actuarial requirements
of our funds under management.
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