Critical Component of an IPS for Risk-Averse Investor

In the context of developing an effective Investment Policy Statement (IPS), consider the case of a high-net-worth individual, Mr. Johnson, who is nearing retirement. Mr. Johnson's primary objectives are capital preservation and generating a consistent income stream. He expresses a strong aversion to volatility and is particularly concerned about sequences of returns impacting his retirement portfolio. Based on these requirements, the IPS should guide the asset allocation strategy to align with Mr. Johnson's financial objectives.

What is the most critical component that the IPS should include to address Mr. Johnson's needs effectively?