Barclays 2008 Annual Report Download - page 78

Risk management
Barclays approach to risk management
Organisation and structure
76 Barclays PLC Annual Report 2008 |Find out more at www.barclays.com/annualreport08
The Committees shown below receive regular and comprehensive
reports. The Board Risk Committee receives quarterly reports on the Group’s
risk profile and forward risk trends (for further information on the
membership and activities of the Board Risk Committee, see page 166).
The Board Audit Committee receives quarterly reports on control issues of
significance and half-yearly impairment allowances and regulatory reports.
See page 163 for additional details on the membership and activities of the
Board Audit Committee. Both Board and Audit Committees also receive
reports dealing in more depth with specific issues relevant at the time. The
proceedings of both Committees are reported to the full Board, which also
receives a concise quarterly risk report. Internal Audit supports both
Committees by attendance and/or the provision of quarterly reports
resulting from its work on governance, risk and control issues of significance.
The Board Audit Committee reviews and approves Internal Audit’s plans and
resources, and evaluates the effectiveness of Internal Audit.
An assessment by external advisers is also carried out periodically.
In addition to the Committees shown in the chart, there is a Brand and
Reputation Committee reviewing emerging issues with potentially
significant reputational impact.
Responsibility for risk management resides at all levels within the Group, from
the Executive down through the organisation to each business manager and
risk specialist. Barclays distributes these responsibilities 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.
Every business manager is accountable for managing risk in his or her
business area; they must understand and control the key risks inherent in the
business undertaken. Each business area also employs risk specialists to
provide an independent control function and to support the development
of a strong risk management environment. This functional approach to risk
management is built on formal control processes that rely on individual
responsibility and independent oversight, as well as challenge through peer
reviews.
The Board approves Risk Appetite and the Board Risk Committee
monitors the Group’s risk profile against this agreed appetite. Business
Heads are responsible for the identification and management of risk in their
businesses. The Group Risk Director, under delegated authority from the
Group Chief Executive and Group Finance Director, has responsibility for
ensuring effective risk management and control.
Board
Board Risk Committee
Board Audit Committee
Authority controls appetite
Risk adjusted
performance
– Approves overall Group Risk Appetite
– Considers the adequacy and effectiveness
of the Group Control Framework.
– Reviews reports on control issues of
Group-level significance.
– Review the Group risk profile.
– Approves the Group Control Framework.
– Approves minimum control requirements
for principal risks.
Board oversight
Assurance Group Chief Executive
Group Executive Committee
Reporting and Control
– Monitors and manages risk adjusted
performance of businesses.
Governance and Control Committee Risk Oversight Committee Treasury Committee
– Reviews the adequacy and effectiveness
of the Group Control Framework.
– Monitors compliance with the
Framework including remediation
of significant control issues.
– Reviews reports on control issues of
Group-level significance.
– 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.
– Ensures current risk profile is consistent
with Group risk appetite.
– Debates and agrees actions on the risk
profile and risk strategy across the Group.
– Considers issues escalated by Risk Type
Heads and Business Risk Directors.
Assurance
Internal Audit
– Assesses the adequacy and effectiveness
of the Group Control Framework.
– Assesses management assurance processes.
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Governance structure at Group level