Effective risk management underpins the delivery of the Group’s strategic objectives. Our established Risk Management Framework systematically identifies, evaluates and prioritises risks, allowing us to mitigate potential impacts, while recognising emerging opportunities.
The Group has a structured and established approach to risk management, ensuring a consistent and planned process for identifying, assessing, prioritising, mitigating and monitoring risks across the business.
The Group’s Risk Management Framework combines a top-down approach to identifying principal risks with a bottom-up process for identifying operational risks.
Our strong risk management culture is centred on achieving an appropriate balance between risk and reward, informed by an assessment of both the likelihood and potential impact of risks in line with the Group’s risk appetite statements. The Group is supported by an embedded risk management IT system and a dedicated Risk and Internal Audit team, who facilitate the risk process by providing guidance and support to management teams, ensuring consistent application of the Risk Management Framework and its associated processes throughout the business.
Effective risk management is fundamental to the achievement of the Group’s strategic objectives and the sustainable growth of the business. The Board retains overall responsibility for overseeing the Risk Management Framework and ensuring appropriate mitigation strategies are in place for the Group’s key risks.
This responsibility is delegated to the GroupRisk Committee, which is chaired by the Chief Financial Officer and includes key internal stakeholders, such as Directors, Executive Directors, Heads of Departments and the Head of Risk and Internal Audit. The Group Risk Committee met four times during the year and provided the Board with regular updates on principal risks, emerging risks, key trends and mitigating actions.
The Audit Committee receives additional assurance over the effectiveness of the Group’s Risk Management Framework and internal control environment through the work of the Risk and Internal Audit team. During the year, the team conducted a programme of reviews including detailed assessments of several principal risks, and reported no significant issues in the Risk Management Framework or internal control environment.
PRINCIPAL RISKS AND UNCERTAINTIES
The Group recognises that it is exposed to a variety of risks however, in common with other businesses, it focuses reporting on those with a high likelihood and significant near-term impact on strategic objectives, operational plans or reputational damage. The Board has undertaken a comprehensive assessment of risks that could compromise the Group’s business model, future performance, solvency or liquidity.
The principal risks and uncertainties facing the Group are summarised here.