Barclays 2014 Annual Report Download - page 141

barclays.com/annualreport Barclays PLC Annual Report 2014 I 139
Overview
Damage to the Group’s brand and consequent erosion of reputation
reduces the attractiveness of the Group to stakeholders and may lead
to negative publicity, loss of revenue, regulatory or legislative action,
loss of existing and potential client business, reduced workforce morale
and difficulties in recruiting talent. Ultimately it may destroy
shareholder value.
Reputation risk may arise in many different ways, for example:
Q Failure to act in good faith and in accordance with the Group’s values
and code of conduct
Q Failure (real or perceived) to comply with the law or regulation, or
association (real or implied) with illegal activity
Q Failures in corporate governance, management or technical systems
Q Failure to comply with internal standards and policies
Q Association with controversial sectors or clients
Q Association with controversial transactions, projects, countries or
governments
Q Association with controversial business decisions, including but not
restricted to, decisions relating to: products (in particular new
products), delivery channels, promotions/advertising, acquisitions,
branch representation, sourcing/supply chain relationships, staff
locations, treatment of financial transactions
Q Association with poor employment practices.
In each case, the risk may arise from failure to comply with either
stated or expected norms, which are likely to change over time, so an
assessment of reputation risk cannot be static. If not managed
effectively, stakeholder expectations of responsible corporate behaviour
will not be met.
The Group designated reputation risk as a Principal Risk and developed
procedures and resources, including the Reputation Risk Principal and
Key Risk Framework (the Framework), to support businesses and
functions in dealing with reputation risks arising in their areas of
activity. This Framework is aligned to the overarching Group ERMF. In
2015 reputation risk has been re-designated as a Key Risk under the
Conduct Risk Principal Risk.
The Framework sets out what is required to ensure reputation risk is
managed effectively and consistently across the bank. Reputation risk
is by nature pervasive and can be difficult to quantify, requiring more
subjective judgement than many other risks. The Framework is
designed explicitly in the light of that subjectivity and, together with
supporting tools, policies and procedures, provides an holistic view of
how the Group managed reputation risk during the year.
The following policies, tools and guidance support the Group’s
businesses and functions in implementing the requirements of the
Framework:
Q The Barclays Way (Code of Conduct) sets out in one place what it
means to work in the Group and the standards and behaviours
expected of all colleagues. It gives examples of how the Barclays
Values should be put into practice in decision-making and highlights
the responsibility of individuals to challenge poor practice whenever
and wherever it occurs
Q The Barclays Guide outlines the Group’s governance framework and
contains information about how the Group organises, manages and
governs itself
Q Reputation Risk Appetite is the level of risk that the Group is
prepared to accept while pursuing its business strategy, recognising
a range of possible outcomes as business plans are implemented
Q The Barclays Lens is an assessment tool made up of five simple
questions designed to ensure that the interests of customers, clients,
shareholders and communities are taken into account in the
decisions made every day. The Lens is applied alongside other
decision-making tools to help the Group move beyond legal,
regulatory and compliance concerns to consider broader societal
impacts and opportunities.
Organisation and structure
The reputation risk governance structure links the Board of Barclays
Bank PLC, senior management and other fora to create a vehicle for the
oversight of reputation risk. The CRRC is the designated Key Risk forum
for reputation risk.
The Group Reputational Committee is a sub-committee of the CRRC,
from which it derives its authority. It has license to investigate any
matters within its responsibilities and obtain information as required
from any employee of the Group, and to make decisions to resolve
reputation issues escalated to it.
Each business (and functions where appropriate) has a clearly defined
procedure for escalation of reputation risks as part of their risk
oversight process. This includes a reputation risk sub-committee (or
equivalent) of their Executive Committee, which has representation
from appropriate specialists e.g. the Head of Communications.
Business Risk Oversight Committee meetings consider all Principal
Risks, and reputation risk as a Key Risk under conduct risk, as they
relate to the associated businesses or region.
Conduct and Reputational Risk Committee
Board Conduct Operational and Reputational Risk Committee
Group Reputational Committee
Has authority to investigate all reputation risk matters and obtain information from any Group employee
Makes decisions to resolve reputation issues escalated to it
Risk review
Risk management
Reputation risk management
Reputation risk
The risk of damage to the Group’s brand arising from any
association, action or inaction which is perceived by
stakeholders (e.g. customers, clients, colleagues,
shareholders, regulators, opinion formers) to be
inappropriate or unethical.
The Strategic Report Financial review Financial statements Shareholder information
Risk review
Governance