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The Board is responsible for risk management and determining the overall risk appetite. The Audit Committee assesses and monitors the risk management framework and specifically reviews the controls and assurance programmes in place.
Principal risks and uncertainties
The execution of the Company’s investment strategy is subject to risk and uncertainty and the Board and Manager have identified a number of principal risks to the Company’s business.
The Company considers its principal risks (as well as a number of underlying risks comprising each principal risk) in four categories:
Investment Risks – the risk to performance resulting from ineffective or inappropriate investment selection, execution or monitoring.
External Risks – the risk of failing to deliver the Company’s strategic objectives due to external factors beyond the Company’s control.
Operational Risks – the risk of loss or missed opportunity resulting from a regulatory failure or the failure of people, processes or systems.
Financial Risks – the risks of adverse impact on the Company due to having insufficient resources to meet its obligations or counterparty failure and the impact any material movement in foreign exchange rates may have on underlying valuations.
Other risks, including reputational risk, are seen as potential outcomes of the core principal risks materialising. These risks are managed as part of the overall risk management of the Company.
A comprehensive risk assessment process is undertaken regularly to re-evaluate the impact and probability of each risk materialising and the financial or strategic impact of the risk. Where the residual risk is determined to be outside of appetite, appropriate action is taken.