Risk Coalition begins consultation on board risk functions
The Risk Coalition has issued a consultation on its ‘Principles and guidance for board risk committees and risk functions in the UK financial services sector’, which was published on 26 June.
According to The Risk Coalition, which is a network of not-for-profit professional bodies and membership organisations which aim to improve risk governance and risk management in the UK financial services sector, the responses to its consultation will be considered in the development of the final version of the guidance.
The Risk Guidance Initiative is The Risk Coalition’s first project, with some 60 individuals interviewed as part of the development of the guidance, including risk committee chairs, chief risk officers, heads of internal audit, investors and academics.
It is now seeking views from board risk committee chairs and members, chief risk officers, chief executives and other senior leaders, chief internal auditors, company secretaries and investors. It is also asking for responses from those outside of financial services.
The consultation will close on 20 September 2019, but The Risk Coalition asked that individuals and organisations respond as early as possible during the consultation period, with a summary of responses then made available in a feedback statement when the final guidance is published at the end of 2019.
It confirmed the outreach programme will continue over the consultation period and will contribute to the final guidance.
The guidance sets out the “need for coherent, principles-based good practice guidance for board risk committees and risk functions” and will provide a benchmark for “what good looks like” in an effort to improve the overall quality of risk management within the UK financial services sector, The Risk Coalition states.
There are two standalone parts to the guidance. Part A focuses on “what can reasonably be expected of a mature board risk committee through defining a number of key principles and supporting guidance”. Part B looks at “the role and responsibilities of the chief risk officer and second line risk function”.
The consultation asks nine specific questions on areas where The Risk Coalition’s initial outreach work has indicated there are divergent practices and opinions.
One such question is, how the board risk committee should interact with other board committees generally, to ensure risk oversight at board level is conducted in the most effective way.
The consultation also asks for views on how the board risk committee should interact with the remuneration committee in relation to incentives and pay awards, and whether the draft guidance provides sufficient clarity of the role of the board risk committee in its relationship with the audit committee.Last Updated: 26 July 2019