The Risk Management Unit works with the business units to establish and maintain effective risk management in the various areas of responsibility.
STAM takes an integrated, organisation-wide perspective of its risk exposure in order to develop and maintain the ability to react to emerging and growing risks in a timely and effective manner. We place great emphasis on the importance of having the highest standards of corporate governance and ethical practices. This involves the establishment of an organisation-wide oversight, risk management and controls around various financial and asset management activities, which include structuring, marketing and managing credit and complex deals.
The Risk Management Unit undertakes various responsibilities which include developing risk classifications and assessment methodologies as part of the Control Risk Self Assessment process.
The unit assists the Board and Management in fulfilling the oversight and governance responsibilities to ensure an effective assessment, monitoring and management of various risks. The unit works closely with fund managers and other parties to provide information for risk monitoring and control purposes. The Risk Management Unit collaborates with fund managers and analysts to understand and analyse risk/return profiles inherent in prospective transactions and existing portfolios. This can be done through the reviewing and analysing of investment concentration by countries, industry sector and asset class exposures.
Elements in the Risk Control Process:
There are five critical elements in the independent risk control process. Risk identification is done through continuously monitoring portfolios by assessing new businesses and complex or unusual transactions and to review risks in light of any market developments and other external events. This is followed by quantifying these risks using the appropriate methodologies and models. Risk policies are then established to reflect our risk principles, risk capacity and appetite. This is consistent with the evolvement of business requirements and international best practice. The unit will report any risk to the Management and Investment Committee and this is done against the approved risk control framework and limits. Risk is then controlled by monitoring and enforcing compliance with the approved risk control framework and limits.