ST. JAMES S PLACE PLC RISK COMMITTEE TERMS OF REFERENCE

Transcription

1 ST. JAMES S PLACE PLC RISK COMMITTEE TERMS OF REFERENCE 1 Constitution On 7 December 2016, the Board of St. James s Place plc (the Company ) resolved the Terms of Reference of a Committee of the Board known as the Risk Committee (the Committee ). 2 Membership 2.1 The members of the Committee shall be appointed by the Board. The Committee shall comprise at least three members of the Board and the majority of the members of the Committee shall be independent Non-Executive Directors. 2.2 Appointments to the Committee shall be for a period of up to three years which may be extended for further periods of three years provided that the director still meets the criteria for membership. 2.3 The Chairman of the Committee shall be an independent Non-Executive Director appointed by the Board. In the absence of the Committee Chairman, the remaining members present shall elect one of themselves to chair the meeting. 2.4 The Company Secretary or the Deputy Company Secretary shall be the Secretary of the Committee. 3 Quorum 3.1 The quorum for decisions of the Committee shall be any two members of the Committee. 3.2 A duly convened meeting of the Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee. 3.3 If a regular member is unable to act due to absence, illness or any other cause, the Chairman of the Committee may appoint another Executive or Non-executive Director of the Company (as appropriate) to serve as an alternate member. 4 Meetings 4.1 Meetings of the Committee shall be held as and when appropriate (but at least four times a year), but formal meetings (particularly if required on short notice) may also be held by telephone. A resolution in writing signed by all the members of the Committee shall be as valid and effectual as a resolution duly passed at a meeting of the Committee. 4.2 Meetings of the Committee shall be convened by the Secretary or Deputy Company Secretary at the request of the Chairman of the Committee. Notice of any meeting of the Committee shall be given to all members and any other person required to attend. An agenda and any available supporting papers will be circulated to all members of the Committee prior to any meeting. 4.3 The meetings and proceedings of the Committee will be governed by the Company s Articles of Association regulating the meetings and proceedings of Directors. 4.4 Only members of the Committee shall have the right to attend meetings of the Committee. However, the Chief Executive, the Executive Director responsible for the Partnership and the Chief Risk Officer will normally attend meetings of the Committee (and other members of the Board may attend at the invitation of the Chairman). The Committee shall have the discretion to decide who, other than its members, shall attend its meetings. The above Executives may inform the Chairman of the Committee 1

2 direct of any matter which they consider should be brought to the attention of, or discussed by, the Committee. 4.5 The Committee shall be entitled to meet any Director or senior manager without any other Executive Director or employee being present, should the Committee wish to do so at any time. 5 Minutes of Meetings 5.1 The Secretary or Deputy Company Secretary shall minute the proceedings and resolutions of all Committee meetings, including the names of those present and in attendance. 5.2 Draft minutes of Committee meetings shall be circulated promptly to the Chairman of the Committee for approval and then to all members of the Committee. 6 Reporting Procedures 6.1 The Committee shall make a statement in the Company s Annual Report and Accounts detailing the membership of the Committee and the work of the Committee in discharging its responsibilities and the Company s risk management and strategy. 6.2 The Committee shall make publicly available its Terms of Reference, explaining its role and the authority delegated to it by the Board. 6.3 The Committee Chairman shall report formally to the Board on its proceedings after each meeting on all matters within its duties and responsibilities. The Committee may make recommendations to the Board as it deems appropriate on any area within its remit. 7 Duties 7.1 The Committee shall: monitor and encourage a culture of effective risk identification, mitigation and management throughout the Company and its subsidiaries (together the Group ); review the Key Risk Indicators ( KRIs ) and the Corporate and Emerging Risk Schedules, including progress on specific mitigation actions and call for reports from management on how material risks are being managed; oversee the activity of the Group s risk and compliance functions and review relevant reports produced by these functions, including whether all actions arising from such reports are completed in a timely manner; liaise with the Audit Committee and have regard to any relevant advice concerning the effectiveness of its current control framework and report to the Board any material areas of concern or weakness identified by the Committee; liaise with the Remuneration Committee in order to assist that Committee to ensure that the Group s remuneration policy for Directors and employees is aligned with the Group s strategy for safe and sustainable growth, mitigates potential conflicts of interest and does not encourage inappropriate risk taking. 7.2 Without prejudice to the foregoing, the Committee shall exercise the following powers and discretions: Review and approve, prior to submission to the Board, the Group s risk appetite statement, risk management framework document and risk policies, including in relation to capital and liquidity, 2

3 taking account of the current and prospective macro-economic, financial and regulatory environment, drawing on financial stability assessments, such as those published by the FCA, PRA and other authoritative sources that may be relevant for the Company s risk policies, and make recommendations on risk appetite to the Board; Review the implementation of management actions and strategic decisions required to meet the capital implications of the Solvency II regulations; Approve and monitor compliance with the Own Risk and Solvency Assessment ( ORSA ) policy, and satisfy itself that the assumptions and calibrations used reflect the Group's forward-looking risk profile; Provide oversight of the Own Risk and Solvency Assessment (ORSA) process; Oversee and advise the Board on the current risk exposures of the Group and future risk strategy with particular, but not exclusive, emphasis on prudential risks and the risks arising from changes to the Group s strategy; Review the schedules produced by Group Risk showing the KRIs and the Corporate and Emerging Risks affecting the Group and the procedures and controls which (if applicable) are in place to mitigate such risks and to identify and manage new risks; Oversee the maintenance and development of the KRIs and other qualitative and quantitative metrics to be used to monitor the Group s risk management performance, including the Group s capability to identify and manage new types of risk that could impact the Group; Oversee and challenge the design and execution of stress and scenario-testing; Receive the annual Money Laundering Reporting Officer (MLRO) report; Review the incentive arrangements applicable to the Partnership from time to time, including any material changes thereof, to ensure that the said incentive arrangements comply with any regulatory requirement, encourage safe and sustainable growth and do not encourage inappropriate risk-taking; Before a decision to proceed is taken by the Board, advise the Board on proposed strategic transactions including acquisitions or disposals, ensuring that a due diligence appraisal of the proposition is undertaken, focusing in particular on risk aspects and implications for the risk appetite and tolerance of the Group, and taking independent external advice where appropriate and available; Review the Minutes of any other Committee concerned with the identification, mitigation and management of the Group s material risks or ensure that they are reviewed by a member of the Committee; Call for reports or presentations from management on a rolling basis on the risks for which the manager(s) is/are responsible and the procedures and controls that are in place for the identification, control and mitigation of such risks and any future risks which may arise; Take into account any legal or regulatory requirements, including the FCA Code of Practice on remuneration and associated guidance, when assessing whether the Group s remuneration policies and systems promote effective risk management and provide advice to the Remuneration Committee on the performance objectives (including risk-based objectives and risk weightings) which are incorporated into the incentive structures for the Executive Directors and other Code 3

4 staff, and on the performance of the Executive Directors and other Code staff in managing the risks affecting the Group; Annually review the procedures for the identification, recording and mitigation of material risks across the Group (including those relating to the prevention of fraud and bribery issues), taking into account any material control failures or weaknesses that had occurred during the year; Review reports on any material breaches of risk limits and the adequacy of proposed action; Report to the Audit Committee and the Board on the work of the Committee, including the Risk Schedules agreed by the Committee and any weaknesses or issues identified by the Committee which may require further action or investigation by Internal Audit on behalf of the Audit Committee or the Board; Review any external statements to be made in the Report and Accounts or other documents concerning the Group s risk management procedures; Ensure the risk management function has adequate independence, resources and appropriate access to information, to enable it to perform its function effectively and in accordance with the relevant professional standards; Recommend to the Board the appointment and/or removal of the Chief Risk Officer; Review reports on the Group from the Chief Risk Officer, monitor the responsiveness of management to the findings or recommendations of the Chief Risk Officer and ensure that the Chief Risk Officer has unfettered direct access to the Chair of the Committee and the Chair of the Board; Consider any other matter specifically referred to the Committee by the Board; Review benchmarking activities as appropriate or oversee any investigation of activities within its terms of reference; and Make recommendations on any of the above matters to the Board. 8 Excluded Matters 8.1 The Committee will not be responsible for: supervising the performance of Executives and will not be required to become involved in dayto-day operations, management functions or decision-making; matters relating to accounting and financial information and related controls which shall be reserved to the Audit Committee of the Board; matters relating to deciding on the level of the salary, bonus, long-term incentives or other benefits applicable to the Executive Directors or other Code staff, which shall be reserved to the Remuneration Committee of the Board; and any other matter which the Board shall advise the Committee is reserved to be determined by it. 8.2 Notwithstanding the above, the Committee may at any time make recommendations to the Board in respect of the above matters for the Board to consider and/or decide as it sees fit. 4

5 9 Annual General Meeting 9.1 The members of the Committee shall, where possible, attend the Annual General Meeting so as to be able to respond to any shareholder questions on the Committee s activities. 10 Review 10.1 The Committee shall, at least once a year, review its own performance, constitution and Terms of Reference (including its interaction with the Audit Committee and the Remuneration Committee), to ensure it is operating at a maximum effectiveness and recommend any changes it considers necessary to the Board for approval. 11 Other Matters 11.1 The Committee shall: have access to sufficient resources in order to carry out its duties, including access to the Company Secretariat for assistance, as required; and be provided with appropriate and timely training, both in the form of an induction programme for new members and on an ongoing basis for all members. 12 Authority The Board authorises the Committee: to investigate any activity within its Terms of Reference and seek directly any information it requires from any employee, (all employees being directed to co-operate with any such request by the Committee) in order to perform its duties; and 12.2 to obtain outside legal or other independent professional advice at the cost of the Company and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary, in accordance with the Board s policy for making independent advice available to its Directors. These Terms of Reference will be subject to review by the Board from time to time. Approved by the Board 7 December