The board is responsible for determining the nature and extent of the significant risks it is willing to take in achieving its strategic objectives. The board should maintain sound risk management and internal control systems.
Model terms of reference for the risk committee of a company and is particularly relevant to banks and other financial institutions (BOFIs). It is also of relevance to companies in other industry sectors when a risk committee, separate from the audit committee, is considered necessary or desirable by the board. It is relevant for companies seeking to comply fully with there commendations of the final report of the Walker review of corporate governance in UK banks and other financial industry entities, the Walker Review, Kay review and the Financial Stability Board – Risk Governance Report.
This guidance draws on the experience of company secretaries and is based on best practice as carried out in some of the UK’s largest listed companies.