The Committee shall be appointed by the Board and shall consist of not less than three members, all of whom should be non-executive directors. At least one member of the Committee shall have recent relevant financial and/or risk knowledge.
The Board shall also appoint the Committee Chairman and in the absence of the Chairman the remaining members present shall elect one of their number to chair the meeting.
The quorum shall be two members.
The Chair of the Group Audit Committee will be on the committee. The Chair of the Risk Committee will sit on the Audit Committee
Only members of the Committee shall have an automatic right of attendance at Committee meetings except that the Group Head of Risk and the Chief Executive will be permanent attendees at each meeting. The Board Chairman and other executive and non-executive directors shall attend the Committee meetings at the invitation of the Committee. The Chairman of the meeting, at his discretion, may also call upon any other person to attend as and when appropriate.
The Company Secretary shall act as Secretary to the Committee.
Meetings shall be held not less than 4 times a year and as otherwise required to enable the Committee to fulfil its obligations to the Company.
The Committee is authorised to:
The Committee has oversight of the Risk Management Framework of the Group and specifically the effectiveness of risk management, governance and compliance activity within the Group. The Risk Committee will support the Board in its consideration of the business activities that expose the business to material risks with explicit and dedicatedfocus on current and forward-looking aspects of risk exposure. It advises the Board on considerations and process for setting the Risk Appetite and related tolerances, taking into account the Board’s overall degree of risk aversion and the Company’s current financial situation. The Board retains responsibility for approval of the Risk Appetite. In reviewing risk management information and in executing its duties the Committee shall keep under review in particular:
5.2 Risk Appetite
The Group Management Board will define and set the proposed Risk Appetite for the business, with input from the Group Head of Risk. The Risk Appetite being the levels of risk acceptable to the Group in delivering its strategy and is ultimately approved by the Board.
The Risk Committee shall on behalf of the Board, review and, if appropriate, challenge the process undertaken by the business in setting this Risk Appetite. The Risk Committee will provide oversight of the process to set and subsequent adhere to the approved risk appetite on a regular basis and at least annually and will make recommendations to the Board. The Committee shall take into consideration:
5.3 Risk Identification
The Committee shall take all steps to ensure that senior management has in place procedures and mechanisms to identify and control all fundamental prudential operational, financial, reputation and regulatory risks within the Group. In order to facilitate this, the Committee shall:
5.4 Internal Capital Adequacy Assessment Process ( ICAAP)
At least annually the Committee shall review the ICAAP recommended by the Risk Management Committee to ensure that:
5.5 Reports to the Committee
The Committee shall request information on risk management sufficient to assure the Committee that risks are being addressed by management in line with the Board’s Risk Appetite including at least:
Notwithstanding the above, the Group Head of Risk, or any other senior manager, may escalate a material issue to the Risk Committee in advance of a scheduled meeting if deemed necessary.
The Group Head of Risk will report to the Risk Committee, be in attendance at each meeting and have direct access to the Chairman of the Committee.
Minutes of the Committee meetings shall be circulated to all members of the Committee and made available on request to all other members of the Board.
The Chairman of the Committee shall report formally to the Board on the Committee’s proceedings after each meeting.
The Chairman will summarise all material items discussed with management and ensure that issues of concern are highlighted.
The Chairman may escalate material issues to the Group Chairman and the Board immediately if he believes it appropriate
The Committee shall:
The Chairman of the Committee shall attend the Annual General Meeting prepared to respond to any shareholder questions on the Committee’s activities.
The Chairman of the Committee will meet with the Chairmen of the Remuneration Committee and the Audit Committee on a periodic basis to discuss specific risk areas. The Chairman of the Remuneration Committee shall ensure that any proposed Remuneration policies have been presented by management and discussed by the Risk Committee in the context of the Board’s Risk Appetite.
The Committee shall, at least once a year, review its own performance, constitution and terms of reference to ensure that it is operating effectively and, if relevant, to recommend any changes necessary to the Board.