AmazonScience/document-haystack

1Executive Board is responsible for establishing a proper business organization, encompassing 2appropriate and effective risk management and approves the strategic plan and the risk 3appetite statement.4The Supervisory Board is regularly informed of the Group’s risk position, risk management 5and risk controlling activities, as well as on our reputational risks and material litigation cases. 6It has formed an Audit and Risk Committee to deal with risk related matters (See ‘Corporate 7Governance Statement – Standing Committees of the Supervisory Board – Audit and Risk 8Committee’). At the meetings of the Audit and Risk Committee of the Supervisory Board, the 9Executive Board reports on key risks, risk strategy, mitigation strategies, and on matters of 10importance due to the risks they entail. The Audit and Risk Committee deliberates with the 11Executive Board on issues of the aggregate risk profile and the risk strategy and supports the 12Supervisory Board in monitoring the implementation of this strategy.13The following functional committees have been set-up by the Executive Board and are central 14to the management of risk:15The Risk and Control Committee is the key committee dealing with review of and decisions 16on material risk topics. It is supported by the Capital Investment Committee, which is 17responsible for overseeing all aspects of risk associated with portfolios of co-investments and 18seed capital investments.19The Reputational Risk Committee is responsible for oversight, coordination, and 20management of reputational risks. It takes preventive decisions on matters which might 21trigger reputational risk, in alignment with our risk appetite.22The Strategic Investment Committee is responsible for corporate investment decisions and 23principal corporate transactions (acquisition, disposals, and joint ventures). In addition, it 24evaluates risks associated with strategic investment decisions and monitors progress and 25performance of approved transactions.26The Chief Risk Officer reports to the CFO and has group-wide responsibility for the 27management of corporate and fiduciary risks as well as for the comprehensive control of risk, 28and ongoing development of methods for risk measurement. In addition, the Chief Risk 29Officer is responsible for monitoring, analysing, and reporting risk on a comprehensive basis. 30We manage our risk and capital via a framework of principles, organizational structures and 31measurement and monitoring processes that are closely aligned with the underlying business 32activities and associated risk profile. To achieve this, the Group leverages Deutsche Bank for 33defined risk services across several risk types, notably in terms of risk principles and 34frameworks, capital models including stress testing as well as support on capital adequacy 35requirements, and in non-financial risks specifically where specialist skills are required. The 36Group control model has been designed to balance the need for alignment with our business 37activities, while maintaining independence and strong relationships with Deutsche Bank key 38control functions.39Risk Appetite and Capacity 40Risk appetite expresses the aggregate level of risk that we are willing to assume within our 41risk capacity to achieve our business objectives. This is defined by a set of minimum 42quantitative metrics and qualitative statements. Risk capacity is defined as the maximum level 43of risk we can assume given our capital and liquidity base, risk management and control 44capabilities, regulatory constraints, and our obligations to stakeholders. 45Risk appetite is an integral element in the strategic planning processes via our business and 46risk strategy, designed to promote the appropriate alignment of risk, capital, and performance 47targets, while considering risk capacity constraints from both non-financial and financial risks. 48In addition, the risk appetite for ESG risk themes including quantitative indicators has been 49defined.50To determine risk appetite, we set different group level triggers and thresholds on a forward-51looking basis and define the escalation requirements for further action. We assign risk metrics 52that are sensitive to the material risks to which we are exposed, and which are able to 53function as key indicators of our financial health. Importantly, we link our risk management 54framework with the risk appetite framework.55The Risk and Control Committee, the Executive Board, and the Audit and Risk Committee are 56provided with the Risk and Capital Profile Report which monitors our firm’s risk profile to 57ensure activities are within risk appetite and align to strategic objectives. If our desired risk 58appetite is breached, a predefined escalation matrix is applied, such breach is highlighted to 59the respective committees. Changes or exceptions to the risk appetite must be approved by 60the Executive Board. 61Risk and Capital Plan 62We conduct an annual integrated strategic planning process which articulates the 63development of the future strategic direction for the business. The strategic planning process 64is designed to deliver an overview of capital, liquidity, and risk under risk-return 65considerations. This process translates our long-term strategic targets into measurable short- 66to medium-term financial targets and enables intra-year performance monitoring and 67        68To our Shareholders Summarised 69Management Report70Consolidated 71Financial Statements Compensation Report Corporate Govern-72ance Statement73Supplementary 74Information DWS 2023 Annual Report75 76Risk Report7747 Risk Framework