2022-23 SGI CANADA Annual Report

Acquisition and Development of Expertise Risk: Increasing complexity of work with rising expectations of customers, brokers and partners requires a multi-talented workforce highly attuned to meeting high expectations and rapid changes in the marketplace. Mitigation: SGI has multiple priority areas in this risk category. Work continues on succession for high-risk senior management positions including Executive and Vice Presidents. A robust assessment model was developed and leveraged for all successors identified as critical. An approach to having more streamlined and consistent development plans for senior leaders is underway to reinforce readiness for potential roles and growth in current role. An overhaul to talent acquisition processes was completed to enable SGI to place people in roles more efficiently and to respond to significant company and external pressures. Human Resources responded to a significant number of market compensation issues that required unique approaches to resolve. Retaining top talent during Corporate Transformation was raised as a risk. In response, a risk and retention framework was built and approved in February 2023 for implementation in June 2023. The risk work will continue for roles critical to SGI but outside of Corporate Transformation in the fall. Significant research was completed for an employee recruitment and retention strategy and approval was granted to work in five key priority areas, with four of the five to advance in 2023. Organizational Change Agility Risk: SGI's ability to successfully meet its objectives is, to a large extent, determined by its ability to prepare for, lead and adapt to change in a responsive and agile manner. Mitigation: SGI has established an Enterprise Change Management Office to ensure the discipline continues to mature at a rate comparable to the pace of change in the organization. In addition to focusing on employees, the enhanced change management service model includes communication, consultation and training supports for SGI's many partners, like issuers and brokers. SGI has also introduced new quantitative assessments to further understand change saturation inside the organization. All SGI initiatives are now scored based on the impact of the change on employees. Corporate scores are reviewed monthly by the Strategic Review Board and quarterly by the Executive Leadership Team. Further, a corporate training program has been developed to help employees and management manage the uncertainties of SGI's Corporate Transformation program - currently the organization's largest change initiative. The curriculum focuses on the skillsets required to lead and adapt in a responsive and agile manner even in the face of sustained workplace change. It also outlines strategies to continue to approach situations with a growth mindset. Comprehensive workforce transformation and learning frameworks have been established to guide the employee transition to a post Corporate Transformation workforce. Information Security Risk: Breach or loss of information or non-compliance with statutory obligations for safeguarding personal information occurs due to ineffectiveness of the policies, standards, procedures and tools used, resulting in financial hardship, reputational damage, and loss of trust by the shareholder, partners and customers. Mitigation: The ongoing Corporate Transformation program at SGI is expected to yield significant benefits in terms of cyber security risk reduction. By leveraging modern technologies, SGI is improving identity and access management, including implementing role-based access security models, improving data protection measures, and strengthening cybersecurity monitoring controls. Furthermore, SGI has had success in attracting and retaining cyber security talent within the security team. This has resulted in increased capacity and expertise in managing cybersecurity risks. The security team is now better equipped to proactively identify and respond to potential threats, conduct risk assessments and implement robust risk mitigation measures. 26 | 2022-23 SGI CANADA Annual Report

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