Our robust Risk Management process ensures risks are identified, evaluated, monitored and controlled by our management team with oversight by the Board.
In order to gain an understanding of the risk exposure of the Group, we review each area of our business annually and use a methodology that will assist the Group in measuring, evaluating, documenting and monitoring its risks within all areas of its operations.
We use our risk management process as described to identify, monitor, evaluate and escalate risks as they emerge, enabling management to take appropriate action wherever possible in order to control them and also enabling the Board to keep risk management under review.
The risk factors addressed below are those which we believe to be the most material to our business model, which could adversely affect the operations, revenue, profit, cash flow or assets of the Group and which may prevent us from achieving the Group’s strategic objectives. Additional risks and uncertainties currently unknown to us, or which we currently believe are immaterial, may also have an adverse effect on the Group.
EMERGING RISKS AND UNCERTAINTIES IN 2020 – COVID-19
We are also mindful of our exposure to emerging risks around which there is currently a high level of uncertainty of the impact on the wider environment and the Group’s operations. At the time of preparing this report, we are monitoring the impact of the Covid-19 pandemic in the UK on a daily basis. Our priority is to ensure the safety of our staff and members.
We are following our robust risk management framework and ensuring that an active risk assessment and business continuity plan is in place, overseen by our Health and Safety Manager, reporting to the Executive Committee. The Group will follow Public Health England and Health Protection Scotland guidance, and medical and local authority advice where relevant, to ensure that we respond to any developments quickly, safely and in the best interests of our people. This includes responding to instructions to close the entire estate as occurred on 20 March 2020. In addition, management has taken a number of actions to reduce costs to mitigate the disruption caused by the outbreak, and it will also seek to access the various government schemes to support businesses. As set out on page 45 (of the Annual Report), appropriate financial modelling has been undertaken to support the assessment of the business as a going concern with the material uncertainty from Covid-19 and in support of viability.
RESPONSIBILITY FOR RISK
The Board is ultimately responsible for ensuring that a robust risk management process is in place and effectively operated. The relevant roles and responsibilities in monitoring and operating the system of risk management are as follows:
- Provides strategic direction on the appropriate balance between risk and reward.
- Sets the ‘tone’ and culture for managing risk and embedding risk management.
- Ensures the most significant risks facing the organisation are properly managed.
- Evaluates the risk implications of planned investments.
- Plans for how the business would manage a crisis.
- Monitors and reviews the Group’s system of internal control and risk management.
- Makes recommendations to the Board for improvements or developments.
- Reviews the Group’s risk appetite.
- Reviews the Group’s risk management framework.
- Promotes and supports the embedding of risk management throughout the business.
- Ensures there is active management of identified and emerging risks.
- Formally reviews the risk register on a regular basis.
- Reports to the Audit and Risk Committee on the internal control environment.
For more information, please read the Principal Risks and Uncertainties section of our Annual Report.