RBS 2011 Annual Report Download - page 106

104 RBS Group 2011
Introduction*: Risk governance continued
The key risk responsibilities of each of these committees as well as their
membership are set out in the table below. Further information on the
Group Board and Board Committees is available on page 252.
These committees are supported at a divisional level by a risk
governance structure embedded in the business. These committees play
akey role in ensuring that the Group’s risk appetite is supported by
effective risk management frameworks, limits and policies, together with
clear accountabilities for approval, monitoring, oversight, reporting and
escalation.
During 2011, the roles and responsibilities of the Executive Risk Forum
and its supporting committees were reviewed and more clearly defined,
to meet the future needs of the Group.
In particular, the Executive Risk Forum was repositioned as a strategic
committee focusing on strategic level risks and issues, and retaining the
approval authority for the most material risk limits and decisions. The
Group Risk Committee was refocused to operate primarily as an
oversight committee across risk types, concentrating particularly on
thematic and emerging risks and issues.
The committees that sit below the Group Risk Committee were
streamlined significantly, aligned more closely to key risk types and given
clearer empowerment and accountability where required.
ACapital and Stress Testing Committee was created as a sub-committee
of the Group Asset and Liability Management Committee to cover risk
and capital matters.
The improvements made in 2011 provide further clarity of roles and
responsibilities, as well as clear reporting lines and accountabilities. They
promote clearer and timelier decision making and more effective risk
management and oversight.
The role and remit of the Group committees is set out below. These
committees are supported at a divisional level by a risk governance
structure embedded in the business.
Board/Committee Risk focus Membership
Group Board The Group Board ensures that the Group manages risk
effectively through approving and monitoring the Group’s risk
appetite, considering Group stress scenarios and agreed
mitigants and identifying longer-term strategic threats to the
Group’s business operations.
The Board of directors
Executive Committee The Executive Committee considers recommendations on
risk management matters referred by the Executive Risk
Forum and/or Group Risk Committee, including
recommendations on risk appetite, risk policies and risk
management strategies.
Group Chief Executive
Group Finance Director
Chief Administrative Officer
Chief Executive Officers of divisions
Head of Restructuring and Risk
Board Risk Committee The Board Risk Committee provides oversight and advice to
the Group Board on current and potential future risk
exposures of the Group and future risk strategy, including
determination of risk appetite and tolerance. It also provides
arisk review of remuneration arrangements and provides
advice to the Remuneration Committee. It operates under
delegated authority from the Group Board.
At least three independent non-executive directors,
one of whom is the Chairman of the Group Audit
Committee.
*unaudited
Business review Risk and balance sheet management continued