Prudential 2021 ESG Report Risk Management Core to the sustainability of Prudential is understanding the risks the Company takes and how they impact our stakeholders, including policyholders. In addition, the Company’s culture of transparency and informed decision-making is foundational to our ability to plan for and mitigate potential risks. Risk Management Framework Risk Governance The risk management framework supports this culture by providing Each of our businesses has a risk governance structure that is supported standard processes and formal governance systems that facilitate by a framework at the corporate level. These provide a common open communication and effective challenge, that value diverse views, framework for identifying and evaluating the risks embedded in and and that encourage constructive engagement. The framework starts across our businesses, developing risk appetite, managing risks, and in the businesses and extends through the corporate centers, which identifying risk challenges and opportunities. Our risk governance are independent of the businesses they support. De昀椀ned roles and structure is overseen by senior management and our Board of Directors responsibilities promote individual accountability, and a robust risk and managed by Enterprise Risk Management (ERM). committee system promotes transparent and collaborative risk review and ERM operates independently and is responsible for recommending informed decision-making. policies, limits, and standards for all risks. ERM oversees these risks A critical element of Prudential’s risk management framework is the under the guidance of the Enterprise Risk Committee (ERC) and Risk ability to quantify risks and understand how risks behave individually Oversight Committees (ROCs). The ERM infrastructure is generally aligned and in aggregate. The Company’s Risk Appetite Framework (RAF) is by risk type, with certain groups within ERM working across risk types. a comprehensive process used to facilitate transparent and sound Business unit Chief Risk Of昀椀cers play a crucial role in translating the decision-making, ensure that risks taken across the Company align with key enterprise risk appetite metrics and limits into day-to-day decision- the capacity and willingness to take those risks, and provide assurance making at the business unit level. They enable ERM to meet the business that Prudential can meet its obligations as they come due. Risk impacts where decisions are made, bringing subject matter expertise in risk are measured and assessed through a comprehensive and cohesive set appetite, investment, market, operational, liquidity, and insurance risk of stress scenarios with varying degrees of severity, including historical into the business unit dialogue on a real-time basis. events such as the Great Depression, the 1918 pandemic, and in昀氀ation during the 1970s. The Qualitative Risk Appetite Framework helps the Company understand and manage risks that are not easily quanti昀椀ed. By continuously scanning the internal environment and reporting 昀椀ndings to leadership and the Board on a regular basis, we can manage and mitigate operational risks in qualitative areas such as culture, reputation, compliance with laws, regulations, and policies, and decision-making incentives. Home Introduction Governance Sustainable Investing People Community Environment About this Report Appendix 12