MATERIAL MATTERS AND RISK MANAGEMENT MATERIAL MATTERS At PPS, material matters are issues that can either directly or indirectly create, preserve or erode financial, economic, environmental and/or social value for the Group and its stakeholders. Both internal and external influences are considered when determining and prioritising material matters and our responses to them. We consider the following matters material to the Group, our members, staff and other stakeholders. RISK MANAGEMENT At PPS, we take care of the financial interests of our members by providing advice, products and services to create, protect and manage their wealth. Our risk appetite is determined by our ethos of mutuality and our commitment to operating efficiently and ethically within legislative parameters to achieve our mandate. PPS risk management – an iterative process applied at strategic, operational and project levels – is integrated throughout all PPS activities. Risks are identified by ascertaining the causes and sources of events, situations or circumstances that could materially impact on the Group, either positively or negatively. Our methods for identifying risk include the following: • Monitoring the external environment and industry trends. • Conducting risk analysis workshops and interviews. • Analysing various scenarios, data and assumptions. • Performing audits. Identified risks are evaluated for likelihood, consequence and velocity, considering the effectiveness of existing controls. All these factors are combined to determine residual risk, which is assessed against our approved risk appetite. Reasonably foreseeable, emerging and relevant material risks are reported in various risk registers. These include current and emerging risks, our long-term strategic targets and our appetite for each risk category. Mitigation plans and existing controls are articulated and measured for all risks. We have also adopted a risk-interconnectedness approach to identify the links between risks and understand the anticipated impact of single events on the risk profile. Risks are evaluated based on patterns identified in terms of causal effect and how they are interconnected in ways that can amplify their impact. This is the first stage of mitigating the effects of external risks and providing deeper and actionable risk intelligence. 44 PPS Integrated Report 2022 Material matters and risk management
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