Investor Presentaiton
MORGAN STANLEY BANK ASIA LIMITED
UNAUDITED SUPPLEMENTARY FINANCIAL INFORMATION
Year ended 31 December 2020
H. PILLAR 3 DISCLOSURE (CONTINUED)
Table OVA: Overview of risk management (continued)
Risk Management Culture (continued)
•
Comprehensiveness: a well-defined, comprehensive risk governance structure maintained by
employees with appropriate risk management expertise that provides for periodic assessment of the
efficacy of the Morgan Stanley Group's risk management framework;
Independence: independent lines of reporting for risk managers in regard to identification,
measurement, monitoring, escalation and mitigation of risk;
Accountability: well-defined roles and responsibilities that establish clear accountability for risk
management and are aligned with the Morgan Stanley Group's disciplinary and compensation
structure;
Transparency: strong risk culture that encourages open dialogue, effective challenge, escalation and
appropriate reporting of risk to senior management, the Board (or a committee thereof) and the
Company's regulators as well as external disclosures of risk matters.
The Company executes risk oversight through multiple lines of defense.
• The first line of defense is provided by the business units where risks are taken. In the course of
conducting business activities, staff in the business units hold frontline positions in the proper
identification, assessment, management and reporting of risk exposures on an ongoing basis, having
regard to the Company's risk appetite, policies, procedures and controls.
•
The second line of defense is provided by independent and effective risk management and compliance
functions. The risk management function is primarily responsible for overseeing the Company's risk-
taking activities, undertaking risk assessments and reporting independently from the business line, while
the compliance function monitors compliance with laws, corporate governance rules, regulations and
internal policies; and
The third line of defense is provided by an independent and effective internal audit function, which is
responsible for providing assurance on the effectiveness of the Company's risk management governance
and controls over key risks within the Company's businesses and functions (including the first and second
lines of defense described above).
Risk Governance Structure
Risk management requires independent bank-level oversight, accountability of the Company's business
segments, and effective communication of risk matters to senior management and the Board. The nature
of the Company's risks, coupled with this risk management philosophy, forms the Company's risk
governance structure.
The Company's risk governance structure includes:
Board and Board Committees
Board Remuneration
and Culture, Values
and Conduct
Committee
Management
Committees
Management
Committee
Board of Directors
Board Audit
Committee
Board Risk
Committee
Board Nomination
Committee
Bank Risk Committee
Above committees are further detailed in Section A of the Unaudited Supplementary Financial
Information.
71View entire presentation