RBS 2012 Annual Report Download - page 319

RBS GROUP 2012
317
Report of the Board Risk Committee
Meetings and visits
The Board Risk Committee held seven scheduled meetings and three
additional ad hoc meetings in 2012. Meetings are held alongside Group
Audit Committee meetings to ensure that the work of the two Committees
is coordinated and consistent. Board Risk Committee meetings are
attended by relevant executive directors, risk management, finance and
internal audit executives. External advice may be sought by the Board
Risk Committee where considered appropriate. During 2012, the
members of Board Risk Committee, in conjunction with the members of
the Group Audit Committee, took part in an annual programme of visits to
the Group’s business divisions and control functions. This programme
included two in depth sessions with the Risk Management function to
consider key risk areas and the risk strategy and operating model. Full
details about the programme of visits is set out in the Report of the Group
Audit Committee on page 311.
Membership
The Board Risk Committee comprises at least three independent non-
executive directors. The Chairman and members of the Committee,
together with their attendance at meetings, are shown below.
Attended/
scheduled
Philip Scott (chairman) 7/7
Sandy Crombie 7/7
Tony Di Iorio (1) 6/7
Joe MacHale 5/7
Brendan Nelson 7/7
Baroness Noakes (2) 5/5
(1) Missed one meeting owing to travel disruption as a consequence of Hurricane Sandy.
(2) Joined the Committee on 1 March 2012; attended all previous meetings as an attendee.
Philip Scott, Tony Di Iorio, Brendan Nelson and Baroness Noakes are
also members of the Group Audit Committee. Sandy Crombie is also a
member of the Group Performance and Remuneration Committee. This
common membership ensures effective governance across all finance,
risk and remuneration issues, and that agendas are aligned and overlap
is avoided, where possible.
Role of the Board Risk Committee
The Board Risk Committee is responsible for providing oversight and
advice to the Board in relation to current and potential future risk
exposures of the Group and future risk strategy, including determination
of risk appetite and tolerance. The Committee reviews the performance of
the Group relative to risk appetite and provides oversight of the
effectiveness of key Group policies. The Board Risk Committee has
responsibility for promoting a risk awareness culture within the Group.
Authority is delegated to the Board Risk Committee by the Board and the
Committee will report and make recommendations to the Board as
required. The terms of reference of the Board Risk Committee are
available on the Group’s website www.rbs.com and these are considered
annually by the Board Risk Committee and approved by the Board.
Risk strategy and policy
•To consider the Group's risk
profile relative to current and
future Group strategy and
Group risk appetite and identify
any risk trends, concentrations
or exposures and any
requirement for policy change.
Risk profile
•To review the performance of
the Group relative to risk
appetite and to review reports
relating to any significant issues
that require, or are subject to,
remedial action or
recommendation arising in the
period under review.
Risk Management
operating model
•To review the Terms of
Reference for RBS Risk
Management; and
•To approve the RBS Risk
Management annual operational
plan with reference to the
appropriateness of the scope
and timing of proposed
coverage in relation to risk.
Risk appetite, framework
and limits
•To consider the Group’s risk
appetite framework and risk
tolerance for current and future
strategy;
•To review the financial, credit,
country, conduct, concentration,
regulatory, operational and
market risk appetite and related
authorities, limits and mandates;
and
•To ensure rigorous stress and
scenario testing of the Group’s
business.
Remuneration
•To provide advice to the Group
Performance and Remuneration
Committee to enable it to
consider adjustments to bonus
pools to reflect risk
management;
•To review year end risk
performance of Executive and
Management Committee
members and the risk weighting
of objectives; and
•To review clawback
recommendations.
Board Risk
Committee