Barclays 2015 Annual Report Download - page 55

home.barclays/annualreport Barclays PLC Annual Report 2015 I 53
Committee composition and meetings
The Committee is comprised solely of independent non-executive
Directors. Following a review by the Board during 2015 of Board
Committee composition, Dambisa Moyo stepped down from the
Committee with effect from 31 August 2015 and Diane Schueneman
joined the Committee with effect from 1 September 2015. Details of the
skills and experience of the Committee members can be found in their
biographies on pages 36 and 37.
The Committee met seven times in 2015, with two of the meetings held
in New York. Two additional meetings were held at short notice for the
sole purpose of considering and approving revised risk limits in
connection with specific transactions and, with the consent of the
Committee Chairman, were not attended by all Committee members.
The chart on page 56 shows how the Committee allocated its time
during 2015. Committee meetings were attended by management,
including the Group Chief Executive, Group Finance Director, Chief
Internal Auditor, Chief Risk Officer, Barclays Treasurer and General
Counsel, as well as representatives from the businesses. Representatives
from the external auditor also attended meetings.
Member Meetings attended/eligible to attend
Tim Breedon 7/7
Mike Ashley 7/7
Reuben Jeffery III* 5/7
Dambisa Moyo (to 31 August 2015)* 3/5
Diane Schueneman (from 1 Sept 2015) 2/2
Steve Thieke* 5/7
* with the consent of the Chairman did not attend the two meetings held at short notice
to consider specific transaction limits
Committee role and responsibilities
The Committee’s responsibilities include:
 recommending to the Board the total level of financial and operational
risk the Group is prepared to take (risk appetite) to create long-term
shareholder value
 monitoring financial and operational risk appetite, including setting
limits for individual types of risk, e.g., credit, market and funding risk
 monitoring the Group’s financial and operational risk profile
 ensuring that financial and operational risk is taken into account
during the due diligence phase of any strategic transaction and
 providing input from a financial and operational risk perspective into
the deliberations of the Board Remuneration Committee.
The Committee’s terms of reference are available at
home.barclays/corporategovernance
The Committee’s work
The significant matters addressed by the Committee during 2015 are described below:
Area of focus Matter addressed Role of the Committee Conclusion/action taken
Risk appetite, i.e. the
level of risk the Group
chooses to take in
pursuit of its business
objectives.
The methodology for calculating the
level of risk appetite.
 Requested a review of the Group’s
risk appetite process and
methodology and debated
proposals from management to
move to a scenario-based stress
testing approach.
 Evaluated the proposed MTP stress
test, agreeing on a scenario
involving a global recession from an
economic slowdown in China.
 Debated the severity of the scenario
and how it would apply across the
Group’s main markets of the UK, US
and South Africa and how it aligned
to regulatory stress tests.
The Committee challenged the
parameters proposed by management
and asked for a parameter to be linked to
PBT. It also asked for early consideration
to be given to the impact of IFRS 9 on
the Group’s risk appetite and stress
testing assumptions. This work is
under way and will be reported to the
Committee in the first half of 2016. Given
the change in methodology, the
Committee requested early sight of the
design and outputs as the new risk
appetite process was implemented,
resulting in a workshop being held in
December 2015. All non-executive
Directors were invited to attend the
workshop.
Stress testing, i.e.
testing whether the
Group’s financial
position and risk profile
provide sufficient
resilience to withstand
the impact of severe
economic stress.
The Group’s stress testing exercises,
including scenario selection and
constraints, the results and
implications of stress tests, including
stress tests run by the Bank of
England (BoE), and regulatory
feedback on the methodology and
results.
 Debated proposals from
management to move to a
scenario-based risk appetite setting
approach and approved a change
to the Group’s methodology.
 Assessed the progress of the BoE
stress test and evaluated the
preliminary results, including
discussing any potential areas of
sensitivity.
The Committee approved the stress test
results for submission to the BoE. It
subsequently evaluated the BoE stress
testing results and feedback from the
BoE on the stress test.
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