Strategic Shareholder Climate and Risk Financial Financial Barclays PLC 268 report information sustainability report Governance review review statements Annual Report 2022 Risk management (continued) Principal risks • The Barclays PLC Board Risk Barclays’ risk culture Committee (BRC): the BRC monitors The ERMF identifies nine principal risks Risk culture can be defined as the norms, the Group’s risk profile against the namely: credit risk, market risk, treasury attitudes and behaviours related to risk agreed appetite. Where actual and capital risk, climate risk, operational awareness, risk taking and risk performance differs from expectations, risk, model risk, conduct risk, reputation management. This is reflected in how the the actions taken by management are risk and legal risk. Note that climate risk Group identifies, escalates and manages reviewed to ascertain that the BRC is was added in January 2022; see page 273 risk matters. comfortable with them. The BRC also for more information. Barclays is committed to maintaining a reviews certain key risk methodologies, Each of the principal risks is overseen by an robust risk culture in which: the effectiveness of risk management, accountable executive within the Group and the Group’s risk profile, including the • management expect, model and reward who is responsible for overseeing and/or material issues affecting each business the right behaviours from a risk and assigning responsibilities for the portfolio and forward risk trends. The control perspective framework, policies and standards that set committee also commissions in-depth • colleagues identify, manage and out associated responsibilities and analysis of significant risk topics, which escalate risk and control matters, and expectations and detail the related are presented by the Group CRO or meet their responsibilities around risk requirements around risk management. In senior risk managers. management. addition, certain risks span across more • The Barclays PLC Board Audit than one principal risk. The Group CEO works with the Executive Committee (BAC): the BAC receives Management to embed a strong risk Risk appetite regular reports on the effectiveness of culture within the firm, with particular Risk appetite is defined as the level of risk internal control systems, quarterly regard to the identification, escalation and which the Group is prepared to accept in reports on material control issues of management of risk matters, in carrying out its activities. It provides a basis significance, quarterly papers on accordance with the ERMF. Specifically, all for ongoing dialogue between accounting judgements (including employees regardless of their positions, management and Board with respect to impairment), and a quarterly review of functions or locations must play their part the Group’s current and evolving risk the adequacy of impairment allowances, in the Group’s risk management. profile, allowing strategic and financial relative to the risk inherent in the Employees are required to be familiar with decisions to be made on an informed portfolios, the business environment, risk management policies which are basis. and Barclays policies and relevant to their responsibilities, know how Risk appetite is approved by the Barclays methodologies. to escalate actual or potential risk issues, PLC Board in aggregate and disseminated • The Barclays PLC Board Remuneration and have a role-appropriate level of across legal entities and businesses, Committee (RemCo): the RemCo awareness of the risk management supported by limits to enable and control receives proposals on ex-ante and ex- process as defined by the ERMF. specific exposures and activities that have post risk adjustments to variable Our Code of Conduct – the Barclays Way material concentration risk implications. remuneration based on risk Globally, all colleagues must attest to the Risk committees management performance including ‘Barclays Way’, our Code of Conduct, and events, issues and the wider risk profile. Barclays various risk committees consider comply with all frameworks, policies and These inputs are considered in the risk matters relevant to their business, and standards applicable to their roles. The setting of performance incentives. escalate as required to the Group Risk Code of Conduct outlines the Purpose, Committee (GRC), whose Chair, in turn, The terms of reference and additional Values and Mindset which govern our escalates to the Barclays PLC Board details on membership and activities for ‘Barclays Way’ of working across our Committees and the Barclays PLC Board. each of the principal Board committees business globally. It constitutes a are available from the corporate In addition to setting the risk appetite of reference point covering all aspects of governance section of the Barclays the Group, the Board is responsible for colleagues’ working relationships, and website at: home.barclays/who-we-are/ approving the ERMF, and reviewing provides guidance on working with other our-governance/board-committees/ reputation risk matters. It receives regular Barclays employees, customers and information on the risk profile of the clients, governments and regulators, The GRC is the most senior executive Group, and has ultimate responsibility for business partners, suppliers, competitors body responsible for reviewing and risk appetite and capital plans. and the broader community. See monitoring the risk profile of the Group. home.barclays/sustainability/esg- This includes coverage of all principal risks, Further, there are two Board-level resource-hub/statements-and-policy- and any other material risks, to which the committees which oversee the application positions/ for more details. Group is exposed. The GRC reviews and of the ERMF and implementation of key recommends the proposed risk appetite aspects, the Barclays PLC Board Risk and relative limits to the BRC. The Committee (BRC) and the Barclays PLC committee covers all business units and Board Audit Committee (BAC). legal entities of the Group and Additionally, the Barclays PLC Board incorporates specific coverage of Barclays Remuneration Committee oversee pay Bank Group. practices focusing on aligning pay to sustainable performance.