Aviva 2006 Annual Report Download - page 89

Overview Business review Governance Financial statements Other information
Aviva plc
Annual Report and Accounts 2006 85
Risk and regulatory committee report
This report provides details of the role of the Risk and Regulatory
Committee and the work it has undertaken during the year.
The Committee was established by the Board in January 2006 and
held its first meeting in April 2006. The purpose of the Committee
is to assist the Board in providing leadership, direction and oversight
with regard to the Group’s governance and regulatory policies
and procedures, including those related to compliance, risk
management, financial malpractice and internal non-financial
controls. The Committee was established as the Governance and
Regulatory Committee but changed its name in June 2006 to the
Risk and Regulatory Committee to more closely describe its main
accountabilities. The full terms of reference for the Committee can
be found on the Company’s website www.aviva.com and are
available from the Group Company Secretary.
The following independent non-executive directors served on the
Committee during the year:
Period
Member From To
Mary Francis (Chairman
from 1 January 2007) 14 January 2006 To date
Russell Walls 14 January 2006 Todate
Wim Dik 14 January 2006 To date
Russell Walls served as the chairman of the Committee from its
inception until 31 December 2006 when he was succeeded as
chairman by Mary Francis. There were no other changes in the
membership of the Committee during the year. The Group
Company Secretary acts as the secretary to the Committee.
The Committee met on three occasions in 2006 and each member
attended every meeting. In addition the Committee held separate
meetings with members of senior management and Ernst & Young
for the purpose of induction and training.
The Group Chief Executive, Group Finance Director, Group Audit
Director and the external auditor normally attend, by invitation,
all meetings of the Committee. Other members of senior
management are also invited to attend as appropriate to present
reports. It is the Committee’spractice at each meeting to meet
separately with the Group Audit Director and the external
auditor without any members of management being present.
In performing its duties, the Committee has access to the
services of the Group Audit Director, the Group Regulatory and Tax
Director, the Group Company Secretary, the Group Financial
Management Director and external professional advice.
The responsibility for overseeing risk, regulatory and compliance
issues, as well as the oversight of non-financial internal controls
was transferred to the Committee from the Audit Committee in
April 2006. The work of the Committee since its establishment
has fallen into the following broad areas:
Risk management
The Committee has received regular reports on the Group’s risk
management processes, including the key risks facing the business
and the measures being taken by management to contain them.
It has also reviewed the processes and governance used by
management to define the Group’s risk appetite and has reviewed
the internal non-financial controls used to monitor the effectiveness
of the Group’s risk management processes.
Regulation and compliance
The Committee has reviewed the Group’s regulatory operating
plan and has received regular reports on its relationships with its
external regulators. In particular, the Committee monitors the
actions being taken by management in relation to the Risk
Mitigation Programme agreed with the Financial Services Authority.
Reports on any material compliance issues are received by the
Committee including any reputational issues which may arise.
In addition, the Committee receives reports on legislative and
regulatory developments which may impact the Group.
Business protection
Reports on financial malpractice are presented to the Committee
including incidences of fraud, anti-money laundering procedures
and arrangements whereby persons can report in confidence
any concerns about matters of probity (whistleblowing).
The Committee proposes to increase its focus into other
areas of business protection as its work progresses.
The chairman of the Committee reports at the subsequent meeting
of the Board on the Committee’s work and the Board receives a
copy of the minutes of each meeting of the Committee.
In line with the Combined Code requirement the Board undertook
areview of the effectiveness of all its committees during the year,
including the Risk and Regulatory Committee.
This report was reviewed and approved by the Board on
28 February 2007.
Mary Francis
Chairman, Risk and Regulatory Committee