Strategic Shareholder Climate and Risk Financial Financial Barclays PLC 368 report information sustainability report Governance review review statements Annual Report 2022 Risk performance - Model risk, Conduct risk, Reputation risk and Legal risk Model risk, Conduct risk, Reputation risk and Legal risk All disclosures in this section are unaudited unless otherwise stated. Trading Entity conduct risk dashboards, Model risk Conduct risk setting out key indicators in relation to Barclays is committed to continuously Barclays is committed to continuing to conduct and risk, are provided to the improving model risk management and drive the right culture throughout all levels respective Board Risk Committees and made a number of enhancements in 2022, of the organisation. The Group will senior management. These continue to be evolved and enhanced to allow effective including: continue to enhance effective oversight and decision-making. Work is management of conduct risk and • Improved transparency and oversight of ongoing to enhance the Conduct Risk appropriately consider the relevant tools, models risk through implementation of Control Environment in a timely and governance and management information upgrades to model risk governance effective manner to ensure the Group in decision-making processes. Focus on structure. operates within Risk Appetite. The management of conduct risk is ongoing • Upgraded model risk standards to tolerance adherence is assessed by the and, alongside other relevant business and business areas through key indicators and improve readability, consistency and control management information, the reported to the relevant Trading Entity framework cohesiveness. Trading Entity conduct risk dashboard is a Board Committees as part of the conduct • Refreshed the model risk controls suite, key component of this. risk dashboard governance process. providing additional clarity on several The Group remains focused on the The Group continues to review the role controls and ensuring evidentiary continuous improvements being made to and impact of conduct risk events and requirements are aligned to MRM’s BAU manage risk effectively with an emphasis issues in remuneration decisions at both processes. on enhancing governance and the individual and business level. • Enhanced the Group Model Risk management information to identify risk at In 2022, the Group maintained focus on Appetite Statement, incorporating earlier stages. new and heightened inherent conduct model quality and uncertainty around a risks, including those relating to the cost of Reputation risk model’s output. living crisis, and continues to monitor Barclays is committed to identifying • Strengthened validation practices these on an ongoing basis. reputation risks and issues as early as through expansion of model-level Businesses have continued to assess the possible and managing them appropriately. validation procedures, implementation potential customer, client and market At a Group level throughout 2022, of an on-going validation training impacts of strategic change. As part of the reputation risks and issues were overseen program and embedment of a validation 2022 medium-term planning process, by the Board which reviews the processes quality assurance process. material conduct risks associated with and policies which Barclays identifies and • Executed on hiring strategy by strategic and financial plans were manages reputation risk. Within the expanding the model risk team to assessed. Barclays Bank UK Group and the Barclays support a wider range of model Bank Group reputation risks and issues Throughout 2022, conduct risks were validation demand and newly emerging were overseen by the respective risk and raised by each business area for model risks. Board risk committees. The top live and consideration by relevant Board level emerging reputation risks and issues within • Progressed model inception validation committees. These committees reviewed the Barclays Bank UK Group and the by bringing more than 95% of model risk the risks raised and whether Barclays Bank Group are included within an (by model output) into compliance with management’s proposed actions were over-arching quarterly report at the the model risk management framework. appropriate to mitigate the risks respective Board level. effectively. The Board reviewed risks escalated by the The Group continued to incur costs in businesses and considered whether relation to litigation and conduct matters, management’s proposed actions, for refer to Note 26 Legal, competition and example attaching conditions to proposed regulatory matters and Note 24 Provisions client transactions or increased for further details. Costs include customer engagement with impacted stakeholders, redress and remediation, as well as fines were appropriate to mitigate the risks and settlements. Resolution of these effectively. The Board also received regular matters remains a necessary and updates with regard to key reputation risks important part of delivering the Group’s and issues, including: Barclays' response to strategy and an ongoing commitment to the conflict in Ukraine; Barclays’ improve oversight of culture and conduct. association with sensitive sectors; access to banking; lending practices and the resilience of key Barclays systems and processes.