Barclays 2012 Annual Report Download - page 58

David Booth, Chairman of the Board Risk Committee, reports on how
the Committee discharged its responsibilities in 2012. From 31 January
2013, the Committee was renamed the Board Financial Risk Committee
and oversight of operational risk was assumed by the Board Conduct,
Reputation and Operational Risk Committee.
Chairman’s overview of 2012
2012 has been another challenging year for the Committee. Global
economic conditions, particularly in the Eurozone, have driven much
of our agenda. We have been looking to take a more holistic view of
risk management, partly in response to regulatory pressure so that we
have an enterprise wide view of risk management that goes beyond
the management of financial risks, such as credit risk, market risk
and funding risk. I held a number of meetings with Barclays regulators
in the UK and US during 2012 to discuss our approach to risk
management and to understand better our regulators’ areas of focus
and how this might impact the remit of the Committee.
I continued this year to request that representatives from the business,
that is, business unit employees with day-to-day operational
responsibility for risk management, attend Committee meetings and
present on specific issues. This provided the Committee with a valuable
insight into how risk management principles are implemented in
the business and gives a sense of the risk management culture in
the business.
I submitted a report after each Committee meeting to the Board, to
ensure that all Board members were aware of the Committee’s areas
of focus. I continued to liaise with Sir Michael Rake, Chairman of the
Board Audit Committee, to ensure that both Committees had
appropriate oversight of risk and control matters. I also met regularly
with the Chief Risk Officer, the Chief Internal Auditor and the Group
Treasurer. In July 2012, I joined the Board Remuneration Committee,
which provides an opportunity for me to provide direct input into
remuneration decisions from the perspective of risk management
and control.
Committee composition, skills and experience
Membership of the Committee and attendance at meetings held in
2012 is set out opposite. The Committee individually and collectively
has experience in finance and financial risk management and that
experience and knowledge was strengthened further in late 2012 with
the appointment of Tim Breedon to the Committee. More information
on the skills and experience of the Committee members may be found
in the Directors’ biographies on pages 67-69. The Committee is keen to
ensure that it has sufficient knowledge and information to be able to
discharges its responsibilities effectively and during 2012, Committee
members attended two specific briefing sessions, the first on
operational risk management, in light of increased regulatory focus
in this area, and the second an in-depth review of the Investment
Bank’s balance sheet.
Committee responsibilities and how they were discharged in 2012
During 2012, the Committee was responsible for:
 recommending to the Board the total level of risk the Group is
prepared to take (risk appetite) to achieve the generation of
shareholder value;
 monitoring risk appetite, including setting limits for individual types
of risk, e.g., credit, market, funding risk and operational risk;
 monitoring the Group’s risk profile;
 ensuring that management properly identifies principal risks and that
they are being appropriately managed;
Member Independent Meetings eligible to attend
David Booth (Chairman) Yes
Tim Breedon
(from 1 December 2012)
Yes
Reuben Jeffery a Yes
Sir Andrew Likierman Yes
Dambisa Moyo a Yes
Sir Michael Rake a Yes
Lawrence Dickinson Secretary
Attended Did not attend
Note
a Unable to attend meetings because of prior commitments.
2012 2011
1 Risk profile/Risk appetite
(including capital and
liquidity management) 61 45
2 Key risk issues 18 38
3 Internal control/Risk policies 6 6
4 Regulatory frameworks 5 4
5 Other (including Remuneration
and Governance issues) 10 7
Board Risk Committee allocation of time %
1
2
3
5
4
“ We have been looking to take a more
holistic view of risk management, so
that we have an enterprise wide view
of risk management that goes beyond
the management of financial risks.”
David Booth
Chairman, Board Risk Committee
Corporate governance report
Accountability continued
Board Risk Committee Chairman’s Report
barclays.com/annualreport56 I Barclays PLC Annual Report 2012