PSP Investments acknowledges that in order to achieve our legislated mandate, we must take risks and manage them appropriately. For this reason, we have established an integrated approach to managing a full spectrum of risks.
PSP Investments' Risk Appetite Statement (RAS) was developed by management and the special Risk Committee of the Board of Directors. Reviewed annually, the RAS formalizes and combines the key elements of risk management at PSP Investments and clearly defines the Government’s assumed appetite for risk. It outlines the appetite, attitude and tolerances to risk of the Board of Directors and management, the role of the Board versus management as well as PSP Investments’ risk governance structure.
The Risk Appetite Overview (RAO) provides a summary of the RAS and is available for download in the box on the right-hand side of this page.
PSP Investments’ Enterprise Risk Management Policy provides a framework for identifying, evaluating, managing, mitigating, monitoring and reporting our various investment and non-investment risks. The ERM Policy also defines and categorizes enterprise risks to facilitate a universal understanding of all the risks faced by PSP Investments.
Enterprise Risk Categories:
PSP Investments' enterprise risk categories are illustrated below:
Sound internal governance forms the foundation of an effective risk management framework. To help ensure appropriate accountability for enterprise risk management, PSP Investments’ risk management policies incorporate three lines of defence:
Given that the Corporation faces risks in all aspects of its activities, PSP Investments promotes a corporate-wide risk-aware culture and strives for a universal understanding of key risks inherent to our activities. Senior management and employees are not only active participants in risk identification, but also in risk identification, evaluation, management, monitoring and reporting.
Board of Directors Oversight
The Board of Directors establishes its risk oversight by:
In order to oversee and manage risks related to its investments and operations, senior management relies on various committees, including the Management Investment Committee, the Management Operations Committee, the Risk Steering Committee, the Valuation Committee, the New Business Activity Committee and the Information Technology Governance Committee.