Introduction 

With strategic objectives clearly defined, organisations should next establish their risk framework. This involves creating the structures, processes, and tools that will guide risk management activities across the organisation. A well-designed framework should:

• Bridge strategic planning and risk management
• Lay down necessary procedures and tools
• Define roles and responsibilities for risk management
• Provide structured approaches for risk identification, assessment, and mitigation

The framework should be designed to support the organisation’s strategic objectives while providing a structured approach to managing potential risks that could impede those objectives.

APRA-regulated entities must develop a formal risk management framework that:

• Is appropriate to the organisation’s size, business mix, and complexity
• Includes clear governance arrangements
• Identifies and addresses all material risks
• Contains internal controls, monitoring, and remediation processes

This framework must be documented and approved by the Board, with regular reviews and updates as required by the standards.

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