REA Group Ltd Annual Report 2021

Annual Report 2021 | REA Group Ltd Opportunities and risks (continued) REA remains committed to delivering the best experience and value for both customers and consumers. This includes engaging with people at every step of their property journey and making the experience easy and stress free. Effective risk management is about taking the right risks, at the right time, for the right return. To achieve this, REA follows accepted standards and guidelines for managing risk. The Group is committed to ensuring that a consistent and integrated approach is established at all levels and is embedded in the Company’s processes and culture. The REA Risk Management Framework comprises several important elements: – Identifying and analysing the main risks facing the Group; – Evaluating those risks – making judgements about whether they are acceptable; – Implementing and documenting appropriately designed controls to manage these risks; – Testing of controls to ensure they are appropriately designed and operating effectively; – Planning for business interruptions and crises; and – Ongoing monitoring, consultation, communication and review. The Group has identified five material risk categories to which the Company has its most significant risk exposures, being: – Strategic risk; – Operational risk; – Compliance risk; – Regulatory risk; and – Credit risk. Each of these material risk categories has either a framework, procedure or policy that sets out how the risks that fall within these categories are to be identified and managed. Clear accountabilities, roles and responsibilities are also articulated from the Board all the way through to a risk and/or control owner. The Executive Risk Committee oversees the implementation of the REA Risk Management Framework, ensuring management fulfils its risk management responsibilities and that risks are operating within the Risk Appetite Statement and Limits approved by the Board. Key REA business risks include: – The development of new technologies and increased competition from existing or new sites and apps, which could affect the existing business model. REA operates in a highly competitive market and constantly monitors and assesses the competitive environment and any potential risks to the Australian and international operations. REA must continue to earn the support of consumers and customers by delivering a market-leading consumer experience and outstanding value for agents and their vendors. – Security incidents caused by adversarial, accidental or environmental threat that may result in the theft or destruction of confidential consumer/customer data and/or loss of REA system integrity. As a technology-focused business, managing security and taking care of consumer and customer data is of crucial importance. REA is vigilant in managing the risk of damaging security incidents, and has appropriate data management, security and compliance policies, procedures and practices in place. – Lack of availability or downtime of websites and apps may result in a poor experience for consumers and customers. To manage the risk of any of the Group’s sites or apps going down, REA has developed and implemented disaster recovery strategies, high- availability architecture, and processes for monitoring the health of systems on an ongoing basis. – Key group business activities (specifically, real estate listings and financial services) are highly dependent on the exposure to macroeconomic, regulatory, legal and geopolitical conditions across the Australian, Indian and Asian markets in which REA operates. These conditions impact economic growth rates, the property market (house prices and availability of stock), interest rates and consumer confidence which can adversely impact the volume of real estate listings and consumers’ willingness and ability to acquire credit. REA mitigates these risks by proactively managing stakeholder relationships, keeping abreast of regulatory change through dedicated committees, monitoring key risk indicators and market conditions. – A breach of REA’s privacy obligations could occur. REA recognises that privacy compliance is critical to maintaining consumer and customer trust. REA maintains a comprehensive privacy compliance program and updates the program to align with changes in the law. REA is committed to the ‘privacy by design’ method of embedding privacy considerations into the company’s products, processes and systems. Year in review Directors’ Report Financial Statements Remuneration Report Sustainability Our Leaders 39