Goverance

The Board of Directors

The Society’s Board of Directors (“the Board”) is comprised of 24 Supreme Directors, the Supreme Chaplain, and the past Supreme Knight. The Board meets on a quarterly basis and governs the Society in accordance with its bylaws between the annual meetings of the Supreme Council. Thus, the Board has full power and authority to conduct the insurance operations of the Society.

The Board has several standing committees. The most relevant with respect to climate-related risks and opportunities are:

The Executive and Finance Committee (“E&F Committee”) – The Supreme Knight, as chairman, the Supreme Chaplain, the Deputy Supreme Knight, Supreme Secretary, Supreme Treasurer and Supreme Advocate and three Supreme Directors to be appointed by the Supreme Knight, shall constitute this committee. As the E&F Committee exercises the power and authority of the Board between meetings, it is responsible for reviewing and approving the Society’s strategic and mission-related matters. This includes environmental, social and governance (“ESG”) and climate risk-related topics.
The Audit Committee – Three Supreme Directors constitute this committee. Among its responsibilities is oversight of risk management.

Management of the Canadian branch of the Society is a cooperative eﬀort among the Chief Agent for Canada and other local Canadian representatives, as well as senior management of the Society.

Based on the Society’s mission and strategic objectives, climate-related considerations are not specifically factored into executive compensation at the Branch or Society level.

Risk Governance Structure

The Enterprise Risk Management (“ERM”) function is responsible for managing and monitoring the Society’s climate-related risks and opportunities associated with its United States and Canadian operations. Even in the absence of physical facilities in Canada, the Society’s ERM function actively considers, through risk identification and risk assessment activities, the potential impacts of risks on the Canadian Branch. In the case of its Canadian Branch, branch management has overall accountability of its operations in Canada, including the Branch’s climate risk management.¹

The ERM department facilitates the consistent identification and assessment of existing and new risks, including climate-related risks, through its administration of the Society’s Risk and Control Self-Assessment (“RCSA”) program. Upon completion, the results are aggregated by the ERM department and presented to the Chief Risk Oﬃcer (“CRO”) and the Enterprise Risk Committee (“ERC”), which exercises oversight and challenge related to the Society’s risk programs and practices.

In addition to the ERC, the Insurance and Investment Risk Committee (“IIRC”) and the Business Recovery Risk Committee (“BRRC”) are also essential components of the Society’s risk governance structure.

Business Recovery Risk Committee – reviews business and disaster recovery matters that are currently impacting the Society or have the potential to impact the Society. Where appropriate, the BRRC considers climate-related risks that could cause operational disruptions.
Insurance and Investment Risk Committee – considers investment risks, including climate-related risk, sets investment rules, and incorporates new guidance around climate-related issues to ensure that the Society remains financially resilient through severe, yet plausible, climate risk scenarios.

The aggregation of risk information promotes a portfolio view of enterprise risks by which the committees illustrated below (see fig. 1) can fulfill their respective oversight responsibilities. The Society’s risk governance structure is designed to provide the Board with reasonable assurance of management’s eﬀective and eﬃcient operation of business activities in the United States and Canada and management of the risk inherent to those activities. The Society has developed and implemented its risk governance structure in a manner that is appropriate and functions eﬀectively commensurate with the size, nature, scope, and complexity of its operations and risk profile.

Figure 1 Risk Committee Governance Structure

The Board of Directors

Risk Governance Structure

Climate-related financial disclosures