Risk and Compliance Committee report continued
The Committee’s areas of focus
Risk appetite
• Overseeing and recommending to the Board the Group’s risk appetite statements, key risk indicators and tolerances for controlling risk within the Board’s stated appetite; • Monitoring the Group’s risk appetite statements, key risk indicators and tolerances; and • Reviewing any outside of appetite risks and assessing the adequacy of mitigating or remedial actions to bring the risks within the Group’s risk appetite. • Overseeing the Group’s Internal Capital Adequacy and Risk Assessment (“ICARA”) process and its compliance with regulatory capital and liquidity requirements; • Recommending the material harm scenarios to be considered and stress tested in the ICARA, as well as liquidity stress tests to be undertaken; • Reviewing and challenging the methodology and output of stress tests, considering recommended management responses, and ensuring that results are incorporated appropriately in the Group’s capital and liquidity planning; and • Ensuring that ongoing consideration is given to capital and liquidity matters as decisions are taken by the Board and the Executive Committee. • Monitoring external developments, for example competition, market conditions, macroeconomic and regulatory environment, taxation and legal developments, in order to assess the potential impact on the Group; • Periodically reviewing the Group’s potential risk exposures, and considering and challenging management’s methodology to identify and address such exposures; and • Recommending to the Board the principal risks to be reported in the Annual Report and Accounts. • Reviewing the adequacy and effectiveness of the Group’s risk management and internal control systems. The CRO provides a quarterly update on its effectiveness; • Reviewing the Group’s approach to the management of outsourcing arrangements; • Maintaining oversight of material issues, errors, breaches and complaints, including consideration of the adequacy of management actions proposed and any consequent implications for the Group’s risk appetite status and framework; • Overseeing the scope and effectiveness of second-line assurance work, whilst considering the results of work undertaken by the third line as far as it affects the Committee’s areas of responsibilities; and • Ensuring that the second-line assurance programme is adequate in view of the complexity and risk profile of the Group, whilst monitoring completion of its work and overseeing remedial actions arising as appropriate.
Capital and liquidity requirements
Top-down and emerging risks
Risk management framework
Overseeing regulatory compliance
• Considering regulatory developments and the potential impact on the Group; • Reviewing key regulatory topics through reports prepared by second-line teams; and • Overseeing regulatory-related projects.
Oversight of the effectiveness of the Risk and Compliance functions
• Safeguarding the independence of the Risk and Compliance teams, and reviewing the adequacy of resources, reporting any concerns to the Board; • Receiving reports from second-line teams, in particular the CRO, and promoting an open and transparent risk culture; • Maintaining effective oversight of the Risk and Compliance functions, monitoring performance against plan; and • Reviewing key communications with regulators and fostering a culture of cooperation and compliance.
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Brooks Macdonald Group plc Annual Report and Accounts 2025
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