Board Risk Committee
1. Board Risk Committee Responsibilities
1.1 Risk Appetite
The Committee shall annually, or more frequently as required, establish and recommend to the Board the Group's Risk Appetite including assessing the appropriateness of the Corporate Plan in the context of Risk Appetite.
1.2 Group Risk Management Policies
The Committee will annually, or more frequently as required, review and recommend the risk strategies, frameworks, policies, models and limits defined in the Group Risk Management Policies that support the Risk Appetite to the Board for approval.
1.3 Risk Control Framework
The Committee shall:
1.3.1 Keep under review the effectiveness of the Group's risk management framework to manage and mitigate risk within the agreed strategy and Risk Appetite.
1.3.2 Challenge the Group's assessment and measurement of key risks.
1.3.3 Provide advice, oversight and challenge necessary to embed and maintain a supportive risk culture throughout the Group.
1.3.4 Provide oversight and challenge of the day-to-day risk management and oversight arrangements of the executive.
1.3.5 Provide oversight and challenge of the design and execution of stress and scenario testing.
1.3.6 Review Internal Capital Adequacy Assessment Process (ICAAP) and Internal Liquidity Adequacy Assessment (ILAA) documents for the Group.
1.3.7 Review external risk disclosures including Annual Report and Accounts, Interim Results and Pillar 3 Disclosures.
1.3.8 Oversight and challenge of due diligence on risk issues relating to material transactions and strategic proposals that are subject to approval by the Board.
1.4 Risk Monitoring
The Committee will:
1.4.1 Review the Group's risk profile in respect of performance against risk appetite, risk trends and risk concentrations.
1.4.2 Receive and review management reports which assess the nature and extent of risks facing the Group.
1.4.3 Oversee and advise the Board on current risk exposures and future risk strategy, including the macro-economic environment.
1.4.4 Monitor the performance of the Executive Risk Committee within the context of the Group's strategy, Risk Appetite and the ERC Terms of Reference.
1.4.5 Receive a quarterly update on Controls, Risk and Compliance Key Performance Indicators (KPIs).
1.5 Remuneration
The Committee will provide advice to the Remuneration Committee on risk adjustments to be applied to performance objectives incorporated in the incentive structure for the executive.
1.6 Reporting
The Committee will provide a separate risk report for the Annual Report & Accounts describing its activities, membership, frequency of meetings together with an assessment of risk appetite, risk management processes to manage risk appetite, and the scope and outcome of stress testing.
2. Composition
Members
Not less than three Non-Executive Directors (one of whom shall be the Chairman of the Audit Committee).
Attendees
Group Finance Director.
Chief Internal Auditor.
Chief Risk Officer.
3. Membership
3.1 Members of the Committee shall be appointed by the Board, on the recommendation of the Nomination Committee in consultation with the Chairman of the Committee. The Committee shall be made up of at least 2 members.
3.2 All members of the Committee shall be independent non-executive directors. The Chairman of the Board shall not be a member of the Committee.
3.3 Only members of the Committee have the right to attend Committee meetings. However, other individuals such as the Chairman of the Board, Chief Executive, Divisional Directors and their representatives may also be invited to attend all or part of any meeting as and when appropriate.
3.4 Appointments to the Committee shall be for a period of up to three years, which may be extended by no more than two additional three year periods, provided the director remains independent.
3.5 The Board shall appoint the Committee Chairman who shall be an independent non-executive director. In the absence of the Committee Chairman and/or an appointed deputy, the remaining members present shall elect one of themselves to chair the meeting.
4. Risk Committee Quorum And Meetings
4.1 Secretary
The Group Secretary or their nominee shall act as the Secretary of the Committee.
4.2 Quorum
The quorum necessary for the transaction of business shall be 2 members. A duly convened meeting of the Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee.
4.3 Frequency of Meetings
The Committee shall meet at least four times a year.
4.4 Notice of Meetings
4.4.1 Meetings of the Committee shall be summoned by the Secretary of the Committee at the request of any of its members or at the request of external or internal auditors if they consider it necessary.
4.4.2 Unless otherwise agreed, notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each member of the Committee and any other person required to attend, no later than 5 working days before the date of the meeting. Supporting papers shall be sent to Committee members and to other attendees as appropriate, at the same time.
4.5 Minutes of Meetings
4.5.1 The Secretary shall minute the proceedings and resolutions of all meetings of the Committee, including recording the names of those present and in attendance.
4.5.2 The Secretary shall record any conflicts of interest divulged at the meeting.
4.5.3 Minutes of Committee meetings shall be circulated promptly to all members of the Committee, and once agreed, to all members of the Board.
4.5.4 Terms of Reference
At least once a year, the Board Risk Committee will review its own performance and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes necessary to the Board for approval.
5. Annual General Meeting
The Chairman of the Committee shall attend the Annual General Meeting prepared to respond to any member questions on the Committee's activities.