AmazonScience/document-haystack

1remediation and control enhancements. It also contains emerging risks and themes that have 2the potential to evolve into top risks in the future. 3Business Continuity and Crisis Management4GRI 3-35Our established business continuity and crisis management approach includes a crisis 6contact and escalation process, which is tested on a regular basis. The Executive Board 7retains overall responsibility for policy setting, supervision and effective implementation and 8has delegated responsibility for business process disruption risk to the Chief Operating 9Officer. As we recognize that significant business disruptions are a possibility, the business 10continuity management program has defined roles and responsibilities, which are designed to 11foster a consistent and effective approach to resiliency throughout our company and to result 12in an effective fit-for-purpose capability. We designed comprehensive business continuity 13procedures to minimize the impact of a significant business disruption, the effectiveness of 14which have been demonstrated through various crises. We are prepared to address adverse 15impacts that a pandemic, epidemic or other disasters may have on the delivery of our 16services. We are also capable of ensuring work-from-home for all our employees at the same 17time, if necessary – including portfolio management. We will maintain a risk-based approach 18and use the recommendations of the World Health Organization and the national health 19ministries, to preserve the health of our staff and clients, also to live up to our responsibility 20for society. Each of the core business functions and infrastructure groups maintain their 21business continuity plans to ensure continuous and reliable service. These plans are 22reviewed, updated and tested annually. 23Dedicated Product Lifecycle Risk Management24We have a product lifecycle management framework that is designed to ensure that 25appropriate systems, processes and controls for the design, approval, marketing, 26management and systematic monitoring of products throughout their lifecycle are in place. 27This framework is designed to manage the risks associated with the implementation of new 28products as well as material product changes during the product lifecycle. Products and 29services are subject to a systematic review process to ensure that the associated risk 30assessment outcome and controls remain fit for purpose.31Dedicated Reputational Risk Management32We have a dedicated reputational risk management framework, which sets out the process, 33including roles and responsibilities, to support employees in identifying, assessing, managing, 34and reporting reputational risk. This process also considers ESG factors. The Reputational 35Risk Committee takes preventive decisions on matters which might trigger reputational risk, 36in alignment with our risk appetite.37We seek to ensure that reputational risk is in line with our business strategy and overall risk 38profile. Reputational risk cannot be precluded and is also driven by any unforeseeable change 39in the perception of practices by our various stakeholders (e. g., public, clients, shareholders, 40and regulators). In line with our fiduciary responsibilities, we strive to balance the firm’s 41reputational risk with the economic interests of our clients.42Financial Risk43IFR Article 4744Key Drivers for Market Risk 45IFRS 7/IAS 146Market risk is the potential for change in the value of financial instruments due to changes in 47market prices. We are exposed to non-trading market risk, which arises from our investments 48and from off-balance sheet exposures. The key risk drivers include movements in interest 49rates, credit spreads, foreign exchange rates, commodity prices, and equity prices. These, in 50turn, can be impacted by general market movements related to the economic environment or 51socio-political and geo-political events. The primary objective in the management of market 52risk is to ensure that risk exposure is within the approved risk appetite.53Market risk primarily concerns liquid seed investments, co- and illiquid seed investments, 54guaranteed products, foreign exchange, pension, and equity compensation, as outlined 55below.56Liquid seed investments: Capital is deployed to build marketable track records by providing 57initial funding for new liquid products initiated by us. These products include primarily 58exchange traded and mutual funds which invest in stocks and bonds. We execute an 59economic risk position offset process to minimize the profit/loss volatility of the seed 60investment portfolio. Liquid seed investments are typically short-term (up to three years, 61frequently shorter) and risk positions are broadly offset within a 6% tracking error on notional 62to minimize market risk. Offsetting positions are classified as derivatives on the balance sheet.63Co- and illiquid seed investments: We have co-investments primarily in fund products that 64invest in alternative asset classes such as real estate, infrastructure, private equity, and 65sustainable investments. Investments are made to ensure an alignment of interest between 66        67To our Shareholders Summarised 68Management Report69Consolidated 70Financial Statements Compensation Report Corporate Govern-71ance Statement72Supplementary 73Information DWS 2023 Annual Report74 75Risk Report7651 Financial Risk