How we manage Risk and Compliance

M&G Treasury & Investment Office’s (T&IO) risk and compliance model has been carefully designed to anticipate and minimise risk within the investment process while providing informed, pro-active guidance that supports the delivery of clients’ long-term investment needs. We call it our ‘three lines of defence’ model:

First line of defence
(Portfolio and Risk Management)

• Identifies risks that could threaten the achievement of business objectives.
   
• Assesses and manages these risks in accordance with our policies, standards and risk appetite.
   
• Ensures the effective design and maintenance of processes together with the implementation of appropriate controls over these processes.
   
• Identifies and promptly escalates significant emerging risk issues.
   
• Reports operational incidents in line with the operational risk standards.

Second line of defence
(Risk and Compliance Oversight and Challenge)

• Assists the Board with the formulation and subsequent communication of Prudential’s appetite for risk, risk management plans, risk policies and limits.
   
• Oversees and objectively challenges the identification, measurement, management, monitoring and reporting of risks.
   
• Analyses risk information and producing risk reports for relevant risk committees.
   
• Develops and supports the implementation of our risk policies, standards and risk appetite.
   
• Provides guidance and advice on regulatory laws, rules and industry standards
   
• Advises on policies, procedures, systems & controls to promote compliance within the business.

Third line of defence
(Audit and Independent Assurance)

• Provides independent assurance on the design, effectiveness and implementation of the overall system of internal control, including risk management