Page 45 - Suncorp_Review

Suncorp Group Limited Annual Report 2010/11 43

Part 3. Senior Executives

3.1 Functions delegated to management

The Board has delegated the following functions to management:

–– development of corporate strategies and business plans in consultation with directors and implementing the corporate strategies approved by the Board

–– making recommendations to the Board on signifcant strategic and business initiatives

–– making recommendations to the Board or relevant Board committee on appointments to senior management roles –– development and maintenance of succession plans for senior management roles

–– development of an annual budget for consideration by the Board and then to conduct the Suncorp Group’s business activities within the approved budget limits –– development and maintenance of risk management systems and frameworks as approved by the Board or relevant Board committee; and

–– managing the business in accordance with regulatory and legislative requirements and within the Suncorp Group’s approved policy and procedures framework.

3.2 Senior Executive performance assessment

A system of balanced scorecards is used to establish performance measures and to monitor the performance of Senior Executives (including the Group CEO, the Senior Leadership Team and their direct reports) against those measures.

The performance measures contained in the scorecards are a mixture of fnancial and non-fnancial indicators and risk-related measures that align with the Suncorp Group and Business Unit business plans approved by the Board, and refect the individual executive’s overall accountabilities and responsibilities.

The Suncorp Group’s performance management system also requires leaders to balance the scorecard result with the manner in which the results were obtained, as the overall performance of each Senior Executive is assessed having regard to the corporate values and the general manner in which the Senior Executive is seen to be supporting the desired corporate culture.

At the end of the fnancial year, the Group CEO conducts an assessment of the performance of each Senior Leadership Team member, relative to the balanced scorecard measures and peer group performance, in the context of industry and market conditions. Those assessments are submitted to the Remuneration Committee for review prior to submission to the Board as part of the remuneration review process. The Group CEO’s performance is subject to assessment by the Board at the end of the fnancial year. The Chairman then communicates the review outcomes as agreed by the Board to the Group CEO.

The Senior Executive performance assessments for year ended 30 June 2011 were conducted in accordance with the arrangements described above.

3.3 Senior Executive induction and education processes

When a new employee is appointed to a Senior Executive role within the Suncorp Group, they receive information and training on the Suncorp Group’s key policies, practices and procedures as well as information relevant to the role they will be performing and the management and business structure within which they will be operating.

Persons appointed to Senior Executive roles, whether they are new or existing employees, are expected to have the qualifcations and industry experience necessary to perform properly the particular duties and responsibilities of their role and to maintain those qualifcations and expertise while they remain in that role. This is also a requirement under the APRA prudential standards which apply to all of the Suncorp Group’s major operating entities.

Under the APRA Fit and Proper Prudential Standard , the Suncorp Group must maintain a Fitness and Propriety Policy, designed to assist in managing risks associated with the appointment of persons to roles that have a signifcant impact on the sound and prudent management of the Group. Under the Group’s Fitness and Propriety Policy, all Senior Executives and directors are subject to a formal assessment process at the time of appointment and on an annual basis thereafter, to confrm they possess and have maintained the necessary skills, knowledge and expertise to undertake and fulfl the particular duties and responsibilities of the position they hold within the APRA-regulated entity.

The Suncorp Group supports Senior Executives and other employees in maintaining and enhancing their industry and business knowledge and expertise, and associated professional qualifcations.

Part 4. Risk management

4.1 Enterprise Risk Management Framework

Risk within the Suncorp Group is defned as any threat to the achievement of the Suncorp Group’s objectives. The Suncorp Group has a structured risk management framework in place in respect of all key risks.

The Suncorp Group has adopted a risk management framework, incorporating the risk governance frameworks, policies, processes and practices which govern the monitoring, management, control and reporting of risks inherent within the business operations. The risk management framework is approved by the Risk Committee, and reviewed and updated on an annual basis.

4.1.1 Regulators

The Suncorp Group is a diversifed fnancial services conglomerate, operating within the general insurance, banking and wealth management sectors and is therefore subject to APRA’s prudential regulation framework. Accordingly, prudential requirements such as maintaining Board approved risk management strategies and reinsurance management strategies form part of the risk management framework. Also, many of the Suncorp Group’s legal entities hold an Australian Financial Services Licence regulated by the Australian Securities & Investments Commission (ASIC) as part of the authorisation required for the provision of fnancial products or services.