Barclays 2014 Annual Report Download - page 127

barclays.com/annualreport Barclays PLC Annual Report 2014 I 125
Authority controls appetite
Board
Ensures that the Group manages risk effectively and as part of this duty, approves overall risk appetite for the Group.
Board oversight and flow of risk related information
Board
Remuneration
Committee
Reviews remuneration
principles and approach and
approves remuneration based
on risk-adjusted
performance.
Board Conduct,
Operational and
Reputational Risk
Committee
Considers and evaluates the
Group’s operational risk
profile and risk appetite and
identifies and manages
conduct and reputational risk.
Board
Audit
Committee
Considers the adequacy and
effectiveness of Group
internal controls.
Board
Financial
Risk Committee
Considers and evaluates the
Group’s financial risk profile
and risk appetite,
encompassing credit, market
and funding risks.
Board
Enterprise Wide
Risk Committee
Considers an enterprise-wide
view of the Group’s risk
appetite and profile and
considers enterprise-wide risk
themes, which may have a
material adverse impact on
the Group’s operations.
The Board Enterprise Wide Risk Committee (BEWRC)
The BEWRC is a committee of the Board, from which it derives its
authority and to which it regularly reports. The principal purpose of the
Committee is to review, on behalf of the Board, management’s
recommendations on risk, in particular:
Q Consider and recommend to the Board the Group’s overall risk
appetite;
Q Review, on behalf of the Board, the Group’s overall risk profile;
Q Satisfy itself on the design and completeness of the Group’s ERMF,
including the Principal Risk categories; and
Q Consider key enterprise wide risk themes.
BEWRC membership comprises the Group Chairman and Chairmen of
the Board Audit Committee, Board Conduct, Operational and
Reputational Risk Committee, Board Financial Risk Committee and
Board Remuneration Committee. The Group Chief Executive Officer
(CEO), Group Chief Risk Officer (CRO), Group Finance Director, Head of
Compliance, General Counsel and Chief Internal Auditor are mandatory
attendees.
The Board Financial Risk Committee (BFRC)
The BFRC monitors the Group’s risk profile against the agreed financial
appetite. Where actual performance differs from expectations, the
actions being taken by management are reviewed to ensure that the
BFRC is comfortable with them. After each meeting, the Chair of the
BFRC prepares a report for the next meeting of the Board. All members
are non-executive Directors. The Group Finance Director and the Chief
Risk Officer attend each meeting as a matter of course.
The BFRC receives regular and comprehensive reports on risk
methodologies and the Group’s risk profile including the key issues
affecting each business portfolio and forward risk trends. The
Committee also commissions in-depth analyses of significant risk
topics, which are presented by the CRO or senior risk managers in the
businesses. The Chair of the Committee prepares a statement each
year on its activities.
The Board Conduct, Operational and Reputational Risk Committee
(BCORR)
The BCORR was created to strengthen the Board-level governance over
conduct risk and reputation matters. It reviews the effectiveness of the
processes by which the Group identifies and manages conduct and
reputation risk and considers whether business decisions will
compromise the Group’s ethical policies or core business beliefs and
values. It also considers the Group’s risk appetite statement for
operational risk and evaluates the Group’s operational risk profile and
operational risk monitoring.
In addition, the Board Audit and Board Remuneration Committees
receive regular risk reports to assist them in the undertaking of their
duties.
The Board Audit Committee (BAC)
The BAC receives, among other reports, quarterly reports on material
control issues of significance, quarterly papers on accounting
judgements (including impairment), and a half-yearly review of the
adequacy of impairment allowances, which it reviews relative to the
risk inherent in the portfolios, the business environment, the Group’s
policies and methodologies and the performance trends of peer banks.
The Chairman of the BAC also sits on the BFRC and BCORR.
The Board Remuneration Committee (RemCo)
The RemCo receives a detailed report on risk management
performance from the BFRC, regular updates on the risk profile and
proposals for the ex-ante risk adjustment. These inputs are considered
in the setting of performance incentives.
Summaries of the relevant business, professional and risk management
experience of the Directors of the Board are given in the Board of
Directors section on page 34. The terms of reference and additional
details on membership activities for each of the principal Board
Committees are available from the Corporate Governance section at:
barclays.com/corporategovernance.
The CRO manages the independent Risk function and chairs the
Financial Risk Committee (FRC) and the Operational Risk and Control
Committee (ORCC), which monitor the Group’s financial and non-
financial risk profile relative to established risk appetite.
The Group Treasurer heads the Group Treasury function and chairs the
Treasury Committee which manages the Group’s liquidity, maturity
transformation and structural interest rate exposure through the
The Strategic Report Financial review Financial statements Shareholder information
Risk review
Governance