NZFunds: Portfolio Management for Individuals
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Corporate governance

Risk Management Framework

NZ Funds’ risk management policies have been established to identify and analyse the risks faced by the Portfolios and the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions, Portfolios and services offered. The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment, in which all employees understand their roles and obligations.

The Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework. This Board has established the Business Review Committee (BRC) which is responsible for developing and monitoring Group risk management policies. Members of the BRC include all Board members together with the Chief Investment Officer, the Chief Financial Officer and General Counsel.

Risk management forms an integral part of NZ Funds' investment management activity and investment mandates are formalised and monitored by various risk management bodies and committees in addition to the Business Review Committee. Key responsibilities for risk management lie with the following committees:

  • Investment Business Group (IBG): Responsible for formulating and approving the business strategy and investment policies for the distribution and management of investment products.  The IBG is also responsible for reviewing proposals for investments, investment managers/firms and outsourcing partners according to defined criteria, risk tolerance and policy;

  • Investment Portfolio Review Committee: Responsible for the monitoring and peer review of investment strategies and performance;

  • Business Risk Committee: Responsible for the monitoring and reporting of breaches of risk parameters and controls;

  • Investment Compliance Committee: Responsible for actively highlighting any potential risk in relation to the investment area and making recommendations to the Investment Business Group of any new or amended policies that will reduce risk.