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Strong governance and risk culture

Managing risk in the long term is central to our promise to provide secure and stable incomes to our customers - making it central to our business.

At Challenger, risk is everyone's business. Culturally, risk filters through all levels of the organisation in the behaviours displayed towards the identification, discussion and mitigation of risk.

We have a suite of policies that detail the expectations of our employees regarding their behaviour, and all policies at Challenger have a whistle-blower provision, with clear instructions on how employees can raise concerns in a confidential and non-threatening way.

Challenger's Board and Leadership team have a long-standing commitment to good corporate governance. Our governance structure provides oversight of the risks and opportunities arising from our activities, and we believe having good corporate governance adds value to all stakeholders and enhances investor confidence. (Read more about Challenger's approach to corporate governance.)

Managing long-term risk in a responsible way

Challenger provides secure income and longevity protection for retirees, which requires focus and expertise in long-term investment including origination, asset management and divestment. Over recent years the proportion of long-term and lifetime annuities we sell has increased significantly, reflecting the increasing demand for retirement income products that will provide a secure and stable income for the retiree's life.

As one of the largest investment managers in the Asia-Pacific region, Challenger recognises the responsibilities we have as a company in relation to sustainability. As such, we ensure we consider environmental, social and governance (ESG) factors in investment decision making and ownership practices. We have adopted an integrated investment management approach to deliver responsible investment outcomes and believe there are links between long-term sustainable returns and the quality of an organisation's ESG practices.

Challenger is a signatory to the Principles for Responsible Investment (PRI) and we have a Board-approved Responsible investment policy. It is Challenger's policy that, to the extent that information is available, investment managers across all asset classes should incorporate ESG issues into investment analysis and decision-making. Challenger also recognises that applying the PRI aligns investors with the broader objectives of societyAt Challenger, we are committed to ensuring the security and protection of all the personal information we hold.  We strive for good privacy practice and our Privacy policy sets out our approach to privacy management. It includes details regarding the types of personal information collected, and how it may be used and disclosed.

Managing privacy and the security of our data

At Challenger, we recognise that the management of fraud and the security of our data are integral to good governance. We address fraud and data security risk through a variety of measures, including:

  • ensuring that employee remuneration is linked to behavioural ratings;
  • conducting operational risk coverage reviews (including fraud risk) across the organisation;
  • employee, customer and supplier due diligence procedures
  • targeted online and face-to-face training for employees; and
  • appointing a dedicated cyber security officer. 

Sustainable taxation

From a risk perspective, Challenger has a stated 'no appetite' for non-compliance with prevailing taxation laws, practice and reporting requirements.

Challenger, in accordance with its corporate governance policies, maintains an open relationship with key regulators, including the Australian Prudential Regulation Authority (APRA), the Australian Securities and Investments Commission (ASIC) and the Australian Taxation Office (ATO).

Challenger has in place a Tax Charter which governs how Challenger manages tax related matters. The Charter states that Challenger will manage its tax obligations in a sustainable manner with regard to the commercial and social imperatives of the business and its stakeholders. 

The Charter further determines that Challenger will comply with prevailing revenue laws and maintain professional relationships with the regulatory and tax authorities in the jurisdictions it operates in.

Challenger does not knowingly participate in the avoidance of tax or facilitate and/or promote the avoidance or evasion of tax by a third party.

Find out more in our 2017 Sustainability Report