Consultation draft principles and guidance set out by the Risk Coalition
In early July, the Risk Coalition published consultation draft principles and guidance for board risk committees and risk functions in the UK’s financial services sector, a development that may be of interest to many of those using our UK company formation services here at London Registrars.
The Risk Coalition is a network of not-for-profit professional bodies and membership organisations seeking to raise the standards of UK risk governance and risk management.
What purposes is the draft guidance meant to serve?
It is intended that the draft guidance will provide coherent and authoritative principles-based guidance on good practice for board risk committees and risk functions.
Other aims of the draft guidance include the development of a common understanding of the purpose and remit of board risk committees and risk functions, as well as the provision of a benchmark against which board risk committees and risk functions can be objectively assessed.
What is contained within the guidance?
The guidance consists of two parts, and assumes that organisations operate a risk management model based on three lines of defence.
The first part of the guidance concentrates on setting out reasonable expectations for a mature board risk committee, by defining eight key principles, alongside supporting guidance on how they may be met. These principles cover such areas as the role of the board risk committee and board accountability, board risk committee composition and membership, risk culture and remuneration, risk management and internal control systems and risk information and reporting.
The second part of the guidance, meanwhile, addresses the role and responsibilities of the chief risk officer and second line risk function.
A consultation of relevance well beyond financial services firms
While the draft guidance’s scope is limited to financial services, the Risk Coalition hopes the principles it establishes will be regarded as pertinent to other sectors, with consultation responses welcomed from those outside financial services.
The consultation will close on 20 September 2019, and the Risk Coalition expects to publish a final version of the guidance in December 2019.
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15 August 2019