Effective risk management plays a vital role in identifying, assessing and mitigating risks that could impact the delivery of the Group’s strategic objectives. It is through an established Risk Management Framework that we are able to manage these risks and identify opportunities as they arise.
The Group has a structured and mature approach to risk management to ensure a systematic and planned method for identifying, assessing, prioritising, mitigating and monitoring risks is taken across the business.
The Group’s Risk Management Framework incorporates a top-down approach when identifying principal risks and a bottom-up approach when identifying operational risks. Our culture of effective risk management is based upon a balance of risk and reward, established through an assessment of the likelihood and impact of the risk, while considering the Group’s risk appetite. The Group also has a dedicated Internal Audit and Risk Team who, supported by a risk management IT system, help to facilitate the risk management process and provide both challenge and advice to Management teams, while ensuring that the Risk Management Framework is consistently applied across the business.
The Board performs annual reviews of the Group’s principal risks and receives regular risk updates to include key emerging risks facing the Group, analysis of risk trends, and actions taken to mitigate risks. The Group Risk Committee reviews risks during the intervening periods and met four times during the course of this year.
In order to deliver our strategic objectives and ensure the sustainable growth of the business, effective risk management is vital. The Board is responsible for maintaining the Risk Management Framework to ensure the Group has appropriate mitigating actions for its key risks. This responsibility is delegated to the Group Risk Committee, chaired by the Chief Financial Officer, and governed by key internal stakeholders including Directors, Executive Directors, Heads of Departments and the Head of Internal Audit and Risk.
In addition, the Audit Committee provides further independent assurance over the Group’s Risk Management Framework and system of internal controls through the established in-house Internal Audit and Risk Team. During the year, the Internal Audit and Risk Team completed various reviews across the Group, including several deep dive risk reviews, and reported no significant failings or weaknesses in the Risk Management Framework and system of internal controls.
Although the Group is exposed to a variety of risks, it only reports on risks with a high likelihood and greater current or near-term impact on strategic objectives, operational plans, or reputational damage. The Board has completed a detailed assessment of risks that could compromise the Group’s business model, future performance, solvency or liquidity.
PRINCIPAL RISKS AND UNCERTAINTIES
The Group is exposed to a variety of risks, however, in common with other businesses, it only reports on those risks with a higher likelihood and greater current or near-term impact on strategic objectives, operational plans, or reputational damage. The Board has carried out a detailed assessment of the principal risks facing the Group, being those risks that could compromise its business model, future performance, solvency or liquidity.
The principal risks and uncertainties facing the Group are summarised here.