Effective Reporting Structures, Process and Risk Management: The Role of the Board in Risk Management/font>
9 February 2012
Registration will open at 9am, with the Masterclass commencing at 9:30am. There will be adequate time allocated for refreshment breaks, lunch and networking opportunities. The Masterclass will conclude at 5pm.
‘Firms are generally undertaking adjustments to increase board and executive engagement and to strengthen the resources, stature, and authority of risk management; however, it is not yet clear whether these changes have contributed to stronger governance.’ Senior Supervisors Group on ‘Lessons Learnt from the Financial Crisis’
Board of directors have viewed risk management from the lens of ‘keep us out of trouble’, while how many risk managers have attempted to address strategic business risks, new product development and competitive advantages?
Assessing the key requirements from boards of directors and requirements from risk managers?
- The Governance Process - The Board’s compliance responsibilities: FSA & Shareholders - The Board’s strategic responsibilities - choices
- The Reporting Process - Reporting to the Board key objectives - The Board’s strategic objectives and to what extent do risk managers understand them? - Does the Board understand the risk implications of its strategy?
- The Communication Process - Key criteria for great understanding and communication between the Board to Risk
- Risk and Return - From a Board perspective (+/- 5% financial results driven) - From a risk perspective: extreme events, scenarios, VaR, Economic Capital driven
- Developing a Business Plan: from business units to Board strategy - Capital allocation and choices - The planning process - Stress tests - Scenario analysis
- Results-driven business units and accountability
- Assessing the role, responsibility and oversight from Board Committees - Board Risk Committee - Board Audit Committee - Board Compliance Committee
- Internal Audit: assurance process and assistance for the risk managers and the Board - Role and responsibility - Reporting to the SINED
- Risk Reporting - VaR and Economic Capital
- Effective Financial Reporting - Budget - Forecast - Revised Annual Forecast - Long Term Forecast - Reconciling risk and finance
- Business Plan and Objectives - Group Level: strategy, capital and risk appetite - Business Level: risk management, capital allocation
- Diverging roles and responsibilities of financial projections and risk analysis - CFO vs CRO responsibilities - Strengthening the role of the CRO and risk department - Role of business line managers
- Financial Results Sensitivity Analysis - Bringing finance and risk together
- Capital adequac - Board assurance - Capital plan - ICAAP - Liquidity adequacy - Board assurance - Liquidity plan - ILAS
- Risk appetite - Board responsibility - Providing assurance risk responsibility - Providing assurance finance responsibility
Masterclass leader:
Brandon James Davies, Board Director, Gatehouse Bank plc Brandon is senior independent non-executive director (SINED) of Gatehouse Bank plc. He is also SINED of Premier European Capital Limited, a private equity company and is also the CEO of dRisk.biz, a company he founded.
Until December 2009 Brandon was Managing Director of the Global Association of Risk Professionals Risk Academy. In that capacity Brandon has produced five books on Basel II and risk management, Governance, Supervision and Enterprise Risk Management.
Brandon has over 30 years of work experience in the banking sector, his positions included Head of Retail Market Risk and Treasurer of the retail businesses of Barclays Bank, and he was also a member of the banks executive committee. Prior to this appointment he was Managing Director of Financial Engineering at BZW and later of Structured Products at BZW and Barclays Capital.
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