Relevance of the eight major risk
categories is considered:

Regulatory compliance. Compliance with laws and regulations.

Strategic. Related to high-level goals, aligned with & supporting the entity’s mission/vision.

Customer trust. Actions or conditions that degrade customer confidence in our Company brand, mission, or our standing in the community.

Financial accuracy. Effectiveness of the entity’s financial reporting.

Core business operational impact. Loss (including risks for financial performance and condition) resulting from inadequate or failed internal processes, people, and systems that support core business functions.

Support business operational impact. Interruptions resulting from inadequate or failed internal processes, people, and systems within business support functions.

Internal compliance. Compliance with company policies and procedures, contracts, ethics and business conduct standards, and other voluntary corporate standards.

Efficiency and effectiveness. Optimization of Company resources to support the business mission and reward shareholders.

Also taken into consideration are risk factors that help define the magnitude and probability of losses caused by unfavorable events or activities, for example:

Operational disruption. Events such as natural disasters, terrorism, interruption by key suppliers, faulty process changes, system failures, and prolonged adverse weather conditions.

Impact on earnings. Competitive pressures, market economic conditions, financial governance, sustainability of the business model.

Impact on strategic initiatives. Changes in leadership, lack of access to capital or liquidity, actions of competitors, changes in broad economic conditions, and adverse actions by foreign governments.

Changes in leadership. Historical leadership change outcomes, succession planning, training and development

Level of automation. Business reliance on technology and systems, historical dependability, the ability to revert to manual alternatives, and the entity’s adoption rate of emerging technology.

Compliance requirements. The ability of the entity to comply with laws, regulations and policies; occurrence of fraudulent, illegal or unethical acts; changing laws; ongoing liabilities and disputes; unsafe products or handling, etc.