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.
This is an area that the Board has always taken seriously. However, it has never been more important than now, as the past year has shown us through the impact of an uncontrollable event in COVID-19.
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.
RISKS AND UNCERTAINTIES IN 2020 RELATING TO COVID-19
The impact of COVID-19 and resulting risks have been a significant feature of the past 12 months. We are continually monitoring the impact of the pandemic and our priority is to ensure the safety of our staff and members. Whilst there are signs of optimism that we will soon be through the cycle of lockdowns and that our business may soon be able to return to trade as normal, there remains uncertainty on the continuing impact of COVID-19 on the wider environment and the Group’s operations.
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. In addition, management has taken a number of actions to increase available liquidity, reduce costs to mitigate the disruption caused by the outbreak, and it will also continue to seek to access the various government schemes to support businesses. As set out on page 51 of the Annual Report 2020, 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 relevant roles and responsibilities in monitoring and operating the system of risk management are illustrated below:
- 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 2020.