As the apex governance body, the Board engages on risk-related matters through the Audit and Risk Committee (ARC). SEDCO’s ERM function reached a new level of formality and maturity in 2025 with Board approval of a new ERM policy.
The policy functions as the backbone of our ERM framework, which is based on a Three Lines Model: assigning clear roles and accountability to various functions and designations across the Company. The comprehensive ERM policy also guides risk assessments, training, and monitoring. It incorporates processes for collaboration and continuous improvement of ERM, through employee feedback, regular policy reviews, and effective stakeholder engagement.
The Company’s ERM strategy integrates risk management into culture and operations, aligning with strategic objectives and using maturity assessments and KPIs to track effectiveness.
Material risks are identified through a structured, enterprise-wide ERM including business-unit risk assessments, investment reviews, portfolio monitoring, macroeconomic and sector analyses, market intelligence, and management workshops.
SEDCO Holding manages investment risk through a structured framework set out in its Investment Risk Management Guidelines. The strategy emphasizes portfolio diversification across asset classes, disciplined investment selection, and a balance between risk and long-term returns. The approach combines investment-level controls with portfolio-level oversight.
Risk Matrix 2025
- Market and Investment Risk (including asset value volatility and concentration risk)
- Interest Rate Risk
- Liquidity and Funding Risk
- Credit Risk
- Operational Risk (process, IT, people, fraud, data, external events)
- Legal and Regulatory Risk
- Compliance Risk
- Shariah Non-Compliance Risk
- Strategic Risk
- Reputational Risk