Airmic is calling on risk managers to assist boards in meeting their risk management obligations, as set out in the FRC 2014 risk management guidance
Risk management, internal control and related financial and business reporting replaces the Turnbull Guidance (2005) and outlines six responsibilities of the board, including those related to: risk management processes; principal risks and risk appetite; risk culture and risk assurance; risk profile and risk mitigation; monitoring and review activities; and risk communication and reporting.
Airmic states in the guide published in May: “The role of the risk manager in helping their board achieve compliance with their risk management responsibilities is extensive.”
“There is a clear and increasing need for in-house risk management expertise to help boards and management to fulfil the obligations.”
The guide sets out steps risk managers should take to achieve the Financial Reporting Council’s (FRC) objectives:
- planning, designing and facilitating the implementation of the overall risk management process for the company;
- taking account of the effect of related risks materialising at the same time, including catastrophic risk combinations;
- establishing mechanisms for monitoring the influence of the risk culture to ensure it is achieved in practice;
- evaluating the procedures for assessing and responding to emerging risks, including reports to the board;
- establishing processes for senior management to monitor the systems of risk management and evaluate risk performance; and
- establishing suitable ‘risk radar’ arrangements to provide early warning of changes in the internal and external risk environment.
No comments yet