Barclays 2012 Annual Report Download - page 316

Barclays risk management strategy
The following pages provide a comprehensive overview of Barclays approach to risk management and more
specific information on policies that the Group determines to be of particular significance in the current
operating environment.
Barclays risk management strategy (audited)
Barclays has clear risk management objectives and a well-established
strategy to deliver them, through core risk management processes.
At a strategic level, our risk management objectives are to:
 Identify the Group’s significant risks;
 Formulate the Group’s risk appetite and ensure that business profile
and plans are consistent with it;
 Optimise risk/return decisions by taking them as closely as possible
to the business, while establishing strong and independent review
and challenge structures;
 Ensure that business growth plans are properly supported by
effective risk infrastructure;
 Manage risk profile to ensure that specific financial deliverables
remain possible under a range of adverse business conditions; and
 Help executives improve the control and co-ordination of risk taking
across the business.
The Group’s approach is to provide direction on: understanding the
principal risks to achieving Group strategy; establishing risk appetite;
and establishing and communicating the risk management framework.
The process is then broken down into five steps: identify, assess,
control, report and manage/challenge. Each of these steps is broken
down further, to establish end-to-end activities within the risk
management process and the infrastructure needed to support it
(see panel below). The Group’s risk management strategy is broadly
unchanged in 2012.
Our risk culture
We have defined our Purpose as ‘helping people achieve their
ambitions – in the right way’. This is underpinned by five core values:
Respect, Integrity, Service, Excellence and Stewardship.
Barclays risk culture is based on a close alignment with our businesses
to support understanding, trust and openness together with clear
independence to ensure strong challenge, rigorous, analytical and
objective decision making and consistency across the bank. Risk is
a shared responsibility between business and risk teams with the
business operating as a ‘first line of defence’.
This culture is operationalised and embedded in our organisational
structure. Independent risk teams are in place within each of our major
businesses to support close working relationships with and knowledge
of business teams taking on the risk. These teams ultimately report to a
Chief Risk Officer within each business who in turn reports both to the
Group Chief Risk Officer and their business Chief Executive.
A separate Group Risk team, including individually identified Principal
Risk Owners for each Principal Risk, strengthens oversight and looks
across the Group to ensure that for each Principal Risk, an overall risk
appetite has been clearly defined and that required standards of risk
management are being consistently delivered.
Following operational events that were identified in 2012, the Board of
Barclays is undertaking a review of its business practices (the Salz
Review) and culture. Barclays Board and Executive Committee will
consider the review’s recommendations carefully, with the intention of
implementing them in full. Barclays will publish an account of how it
specifically intends to implement them a short time after the
conclusion of the review. The broader work at Barclays oriented at
changing the Bank’s culture will be particularly informed by the
Review’s recommendations.
These disclosures are unaudited unless otherwise stated
Steps Activity
Identify  Establish the process for identifying and understanding business-level risks.
Assess  Agree and implement measurement and reporting standards and methodologies.
Control  Establish key control processes and practices, including limit structures, impairment allowance criteria and
reporting requirements.
 Monitor the operation of the controls and adherence to risk direction and limits.
 Provide early warning of control or appetite breaches.
 Ensure that risk management practices and conditions are appropriate for the business environment.
Report  Interpret and report on risk exposures, concentrations and risk-taking outcomes.
 Interpret and report on sensitivities and Key Risk Indicators.
 Communicate with external parties.
Manage and Challenge  Review and challenge all aspects of the Group’s risk profile.
 Assess new risk-return opportunities.
 Advise on optimising the Group’s risk profile.
 Review and challenge risk management practices.
barclays.com/annualreport314 I Barclays PLC Annual Report 2012
Risk management
Barclays risk management strategy