Barclays 2014 Annual Report Download - page 128

126 I Barclays PLC Annual Report 2014 barclays.com/annualreport
Risk management
Risk review
setting of policies and controls; monitors the Group’s liquidity and
interest rate maturity mismatch; monitors usage of regulatory and
economic capital; and has oversight of the management of the Group’s
capital plan.
The Head of Compliance chairs the Conduct and Reputational Risk
Committee (CRRC) which assesses quality of the application of the
Reputation and Conduct Risk Control Frameworks. It also recommends
risk appetite, sets policies to ensure consistent adherence to that
appetite, and reviews known and emerging reputational and conduct
related risks to consider if action is required.
The Enterprise Wide Risk Management Committee (EWRMC) was
established by, and derives its authority from, the CRO. It supports the
CRO in the provision of oversight and challenge of the systems and
controls in respect of risk management. EWRMC membership includes
the CRO, CEO, Group Finance Director, Group General Counsel, and
Head of Compliance.
Risk governance and assigning responsibilities
Responsibility for risk management resides at all levels of the Group,
from the Board and the Executive Committee down through the
organisation to each business manager and risk specialist. These
responsibilities are distributed so that risk/return decisions are: taken
at the most appropriate level; as close as possible to the business and,
subject to robust and effective review and challenge. The
responsibilities for effective review and challenge reside at all levels.
The ERMF was introduced as part of the Transform programme and
sets out the activities, tools, techniques and organisational
arrangements to ensure that all material risks are identified and
understood, and that appropriate responses are in place to protect the
Group and prevent detriment to its customers, colleagues or
community, enabling the Group to meets its goals, and enhance its
ability to respond to new opportunities.
It covers those risks incurred by the Group that are foreseeable,
continuous and material enough to merit establishing specific
Group-wide control frameworks. These are known as Key Risks. See
Principal Risks on page 141 for more information.
The ERMF is intended to be widely read with the aim of articulating a
clear, consistent, comprehensive and effective approach for the
management of all risks in the Group and creating the proper context
for setting standards and establishing the right practices throughout
the Group. The ERMF sets out a philosophy and approach that is
applicable to the whole bank, all colleagues and to all types of risk and
defines the roles and responsibilities of all employees with respect to
risk management, including the CRO and the CEO. It also sets out
specific requirements for key individuals, including the CRO and CEO,
and the overall governance framework that will oversee its effective
operation. See Risk Culture in Barclays PLC Pillar 3 Report for more
information.
The EMRF supports risk management and control by ensuring that
there is a:
Q Sustainable and consistent implementation of the three lines of
defence across all businesses and functions;
Q Framework for the management of Principal Risks;
Q Consistent application of Barclays’ risk appetite across all Principal
Risks; and
Q Clear and simple policy hierarchy.
Credit Risk
Market Risk
Funding Risk Operational Risk Conduct Risk
Reputation Risk
Board Financial Risk Committee Board Conduct Operational and Reputational Risk
Committee and Board Audit Committee
Financial
Risk Committee
■ monitors risk profile
with respect to risk
appetite
■ debates and agrees
actions on the
financial risk profile
and risk strategy
across the Group
■ considers issues
escalated by Risk Type
Heads and Business
Risk Directors
Treasury
Committee
■ sets policy/controls
for liquidity, maturity
transformation and
structural interest rate
exposure
■ monitors the Group’s
liquidity and interest
rate maturity
mismatch
■ monitors usage of
regulatory and
economic capital
■ oversees the
management of the
Group’s capital plan
Tax Risk
Committee
■ monitors the tax risk
profile in respect of
risk appetite
■ assesses the quality of
the application of the
control framework
■ considers issues that
arise as a result of
developing trends
Operational Risk
and Control
Committee
■ reviews, challenges
and recommends
appetite for
Operational Risk
■ monitors risk profile
– against risk appetite
– for relevant Key Risk
Types
■ reviews the Group’s
aggregate Operational
Risk profile
■ reviews and
challenges
presentations on
individual Key Risk
Types
Conduct and
Reputational
Risk Committee
■ assesses quality of the
application of the
Reputation and
Conduct Risk Control
Frameworks
■ recommends risk
appetite and sets
policies to ensure
consistent adherence
to that appetite
■ reviews known and
emerging reputational
and conduct related
risks to consider if
action is required
■ proactively considers
reputational and
conduct related
issues that arise as a
result of business
activity and from
external forces
Enterprise Wide
Risk Management
Committee
■ considers the key
Group-wide risk
themes which may
have a significant
impact on the Group
■ considers the overall
risk profile
performance against
risk appetite
■ considers the design
and completeness of
the Enterprise Wide
Risk Management
Framework
■ also reports into the
Board Enterprise Wide
Risk Committee
Reporting and control