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Risk management governance
Barclays manages a variety of risks in the ordinary course of
business. These risks are identified, measured and monitored
through various control mechanisms across the Group, in
accordance with the requirements of the guidance ‘Internal
control: Guidance for Directors on the Combined Code’ issued
by the Institute of Chartered Accountants in England and Wales.
The Board sets risk management standards and risk appetite
for the Group, and is supported in this role by the Board Risk
Committee, whose responsibilities include:
- Reviewing, and recommending to the Board, standards
for risk management, including risk control principles,
behavioural standards, and overall risk measures.
- Reviewing the overall risk appetite and profile of the
Group.
- Reviewing significant changes in risk governance policy.
- Reviewing reports on specific material aspects of the
Group’s risk governance and risk management processes.
The responsibility for managing risk lies with the Group Chief
Executive and the Group Executive Committee. On a day to day
basis, risks are managed through a number of management
committees (see chart below) and through a
Group Risk organisation which reports to the Group Risk
Director. Through this process, Barclays monitors compliance
within the overall risk policy framework and ensures that the
framework is kept up to date. Risk management information is
provided on a regular basis to Group Executive Committee, the
Board Risk Committee and the Board.
Risk management organisation
Against a background of a rapidly changing business
environment, Barclays believes that its risk organisation needs
to be capable of adapting quickly to new product and business
structures. During 2000, Barclays embarked on the development
of a more integrated risk organisation which is both flexible in
the face of changing business needs and supports the
implementation of Value Based Management in Barclays.
A key feature of the new integrated risk management
organisation is that it brings together both business risk
functions and specialist risk teams.
Risk management in the businesses (including The Woolwich)
is the responsibility of the risk business partners, who have a
functional reporting line to the Group Risk Director. The key
role of risk business partners is to assist the businesses to
maximise value by:
- Performing high quality analysis of risks.
- Ensuring that risks are properly controlled.
- Evaluating economic trade-offs between risks.
- Designing cost-effective ways of mitigating and
transferring risks.
- Generating alternative strategies regarding risk.
Specialist risk teams measure and control aggregate risk, and
provide high level policies and standards within the overall
corporate governance framework. Specialist areas also
perform research & development and quality assurance, and
provide analytical support to the businesses.
The following risks are covered by this process:
Further analysis of these risks is provided in subsequent
sections of the Financial Review.
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