Customers


Workplace


Environment


Communities


How We Operate


108


Managing Risk MATERIAL TOPIC


Context


• The “too big to fail” theory has placed increased scrutiny on banks and their approach to managing risk.


• It is widely agreed that high- quality, transparent disclosure about risk management practices will help restore confidence in the banking industry and ensure financial stability.1


Materiality and Strategy


TD’s CEO and Senior Executive Team set the tone for TD’s Risk Appetite, which helps determine our missions, vision and Guiding Principles. These governing objectives guide TD’s risk culture, where the only risks taken are those that can be under- stood and managed. Through our Enterprise Risk Framework and our Risk Appetite Statement, our share- holders and employees can have a common understanding of how we manage risk.


TD’s Risk Appetite Statement


We take risks required to build our business, but only if those risks:


1. Fit our business strategy and can be understood and managed;


2. Do not expose the enterprise to any significant single loss events; we don’t “bet the bank” on any single acquisition, business or product; and


3. Do not risk harming the TD brand.


Risk Management at TD


• TD employs a “three lines of defence” model that describes the role of the businesses, governance, risk and oversight groups, and Internal Audit in managing risk across TD.


• TD monitors and reports on risk levels on a regular basis within the context of TD’s risk appetite and reports on monitoring activities to senior management, the Board and its committees.


• Education and communication take place throughout the organization through enterprise risk communication programs, employee orientation and training, and participation in internal risk management conferences.


• Five members of the Board have experience in risk management.


2013 Highlights


• In addition to the review and approval of the enterprise risk and risk appetite frameworks, further enhancement and development of risk frameworks for all of the bank’s major risk categories continue.


• TD applied our Environmental and Social Credit Risk Management Process to credit and lending in the wholesale, commercial and retail businesses.


• TD actively monitors, manages and con- tinues to enhance the ability to mitigate technology and security risks through enterprise-wide programs, industry best practices and robust threat and vulnerability assessments and responses.


• Management self-assessments relating to the risk governance provisions of OSFI’s Corporate Governance Guideline, supplier risk management leading industry practices, regulatory requirements and risk data aggregation reporting were completed.


Please refer to TD’s Annual Report for a thorough discussion on TD’s approach to risk management.


+ TD’s Approach to Risk Management and 2014 Proxy Circular


1


Enhancing the Risk Disclosure of Banks. Page 1. www.financialstabilityboard.org/publications/r_121029.pdf


TD 2013 Corporate Responsibility Report


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