The Risk Management Framework: MSM has adopted the 4 lines of defence model as the fundamental approach to ensure the effectiveness of risk management. The framework seeks to minimise risk incidents and maximise business outcomes by allowing us to: The process of risk management adopted by the Group is illustrated below: Determine how best to deal with these risks to manage overall potential exposure Manage the identified risks in appropriate ways Escalate to the Management and Board on a periodic basis on how significant risks are being managed, monitored, assured and improved Understand the risk environment, and assess the specific risks and potential exposure Monitor and seek assurance on the effectiveness of the management of these risks and intervene for improvement where necessary Establish Context Establish the strategic, organisational and risk management process context by considering the environment within which the risks are present Analyse Risk Assess risks in terms of impact and probability, and plot them on the risk matrix to derive a prioritised list of risks for further action Treat Risk Identify controls and responses to manage inherent risks to an acceptable residual risk level. Assess the effectiveness of mitigating controls in collaboration with the relevant risk and control owners Identify Risk Identify all uncertain future risk events that may impact the achievement of objectives, which form the basis for further analysis Evaluate Risk Establish an understanding of the risks by considering the relationships between the causes, risks and consequences and thus enable us to evaluate key risk-mitigating controls Communicate and Consult Monitor and Review SUSTAINABILITY JOURNEY HOWWE ARE GOVERNED FINANCIAL STATEMENTS ADDITIONAL INFORMATION 253
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