From the Fifth Third 2020 ESG Report: Enterprise Risk Management
August 11, 2021 at 11:30 AM EDT
SOURCE: Fifth Third BancorpDESCRIPTION:
Fifth Third Bank has been in business since 1858 and has been successful over this span of years by effectively balancing risk and return.
We take risks every day delivering products and services to customers and executing our business processes and activities. Therefore, we are responsible for managing these risks effectively to deliver through the cycle value and performance for our shareholders, customers, employees, and communities.
ALIGNMENT WITH OUR CORE VALUES AND CULTURE
Our Core Values and culture provide a foundation for supporting sound risk management practices by setting expectations for appropriate conduct and accountability across the organization.
Our approach to sound risk management is grounded on each employee living our Core Values and acting in an ethical and responsible manner as we serve the financial needs of our customers and communities. Our culture is embodied in the Fifth Third Compass, which informs our actions and decisions, from how we navigate our daily work and recognize each other’s efforts, to the way we behave with customers, each other and our communities.
The Compass also guides our strategic direction and actions as we keep the customer at the center and work toward achieving our Vision to be the one bank people most value and trust. By focusing on the future and uniting us as one team, the Compass represents who we are, what we believe and how we define success—all of which are key drivers of our risk management strategy.
Fifth Third’s Risk Management Framework outlines our approach to managing risk in support of our Vision.
Fifth Third’s risk appetite is established in alignment with our strategic, financial and capital plans. The Board and executive management approve the risk appetite, which is considered in the development of business strategies and forms the basis for enterprise risk management. The risk appetite is defined using quantitative metrics and qualitative measures to ensure prudent risk taking and drive balanced decision making. Our goal is to ensure that aggregate risks do not exceed Fifth Third’s risk appetite, and that risks taken are supportive of our portfolio diversification and profitability objectives.
The core principles that define our risk appetite and ensure we are operating in a safe and sound manner are:
Fifth Third’s risk governance structure ensures proper oversight of risk across the organization. It provides a path for escalation of risks and issues to management and Board-level committees to drive effective risk decisioning. The Board is responsible for actively overseeing risk-taking activities and holding management accountable for adhering to the risk management framework. The Board delegates certain responsibilities to Board Committees, including the Risk and Compliance Committee and the Audit Committee.
The RCC is the primary committee that oversees risk and assists the Board in its oversight of the Bancorp’s Risk Management Framework and approves the framework and primary risk management policies.
The Audit Committee of the Board is the primary committee that has responsibility, fiduciary duty and authority to oversee the management, financial statements and audit functions.
The Enterprise Risk Management Committee is chaired by the Chief Risk Officer. It is comprised of senior management and reports to the RCC. The committee is responsible for reviewing and approving frameworks and policies to ensure effective risk management, overseeing the management of all risk types to ensure that risks remain within Fifth Third’s risk appetite and fostering a risk culture that supports our risk management objectives.
The ERMC oversees key management committees responsible for specific risk types and key risk related policies and processes, in order to support an aggregate view of risk and provide executive level risk management oversight of all risk types.
Read the full Enterprise Risk Management section of the Fifth Third Bank 2020 ESG Report beginning on page 37.
Tweet me: .@FifthThird's approach to sound risk management is grounded on each employee living the bank's Core Values and acting in an ethical and responsible manner as they serve the financial needs of customers and communities: https://bit.ly/3iDOhXC
KEYWORDS: NASDAQ:FITB, Fifth Third Bank, ESG, risk management, Ethics