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The Bank faces a wide range of increasingly complex risks, and the challenge is ensuring that risk taking is deliberate and consistent with the Bank’s mission. Sound risk management requires continued focus on financial decisions and on fiduciary compliance. But it must also be comprehensive—to ensure that opportunities are not missed and that the full range of risks is considered.
The Integrated Risk Management Framework adopted in fiscal 2003 builds on the Bank’s long-standing risk management practices and aims to produce value greater than the sum of the parts. It focuses on strategic effectiveness, operational efficiency, stakeholder support, and financial soundness. These four focal areas represent an organizing principle—and are part of a whole. By reviewing potential risk areas, the Bank’s Management Committee, made up of the Bank’s
Managing Directors, can provide oversight and policy guidance for risk taking at all levels of the Bank. The aim is to promote better risk taking, not risk avoidance, and thus contribute to greater development impact from all resources at the Bank’s disposal. The financial risk management
process is described fully in volume 2 of the Annual Report, in “Management’s Discussion and Analysis.”
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