Governance and risk

Effective governance and risk management are essential. They help us to run our business efficiently, build trust with our shareholders and meet the challenges of an ever-changing world.

Aviva is proud to have a well-established governance structure that provides strong leadership and direction. Our Annual Report and website contain full details of our corporate governance strategy, policies and practices.

This page is a summary of our approach to managing corporate responsibility (CR), including our processes for managing risk.

Corporate responsibility management

Management of CR at Aviva is based on global policies and processes which are designed to support the delivery of regional strategies and programmes.

The diagram below shows how our Group, regional and country-based CR representatives, together with the Group CR Advisory Group, sit within Aviva’s overarching corporate governance structure. Both report to the board via the Executive Committee and, ultimately, the Corporate Responsibility Committee.

Our CR Committee is chaired by non-executive director Carole Piwnica, and comprises our chairman, group CEO and two other non-executive directors, Scott Wheway and Euleen Goh.

The Committee reviews strategy and policy and receives regional and functional reports four times a year. In 2010 it received reports from all regional offices and from the IT, Audit, Procurement and Customer teams. Standing agenda items included business ethics and the Street to School programme. The Committee’s report is available in our Annual Report.

Our CR Advisory Group supports and advises on the management and implementation of the global CR programme. Membership of the Advisory Group is being extended during 2011 to include external stakeholders representative of our strategic priorities and activities. The internal members comprise Group CR specialists, regional CR leads and HR directors, who work together to adopt and refine CR strategies, assess progress, identify actions and embed our programmes in different parts of the business.

In addition, the Aviva board receives both annual and ad hoc updates on CR strategy, activities and progress. Our CR programme is regularly on the agenda at the Group executive committee and regional performance against Group key performance indicators (KPIs) is reviewed quarterly. A percentage of our senior executive remuneration is dependent on performance against our CR key performance indicators.

Reducing risk and increasing value

While Aviva has remained well capitalised throughout the economic downturn with sufficient reserves in place, we have strengthened our global risk function group-wide to further support the business.

Our risk management is based on three lines of defence: accountability, objective challenge and reliable independent assurance.

The benefit of this modus operandi is a coordinated, consistent approach to risk management across the Group, including an appropriate risk culture, effective control of risks and a focus on delivering business objectives and solutions.

This new risk management model, backed by our improved external recognition – for example, our Standard & Poors Enterprise Risk Management rating – ensures that the management and mitigation of risk remains central to our business strategy and decision making.

See our material CR risks and how we’re acting to minimise them in our CR strategy section. Read more about our approach to risk management in our Annual Report’s Risk section.