Risks and opportunities

Our approach to managing risk actively supports the development of a successful and sustainable business by ensuring well informed risk-reward decisions are taken in pursuit of our business plan objectives. Our Enterprise Risk Management (ERM) framework drives the way we think and act, from our Chief Risk Officer's participation in the Group Executive through to the actions of our people every day.

Our enterprise risk framework with a circle in the middle and the five elements of the framework, emerging risk, risk culture, risk control processes, strategic risk management and risk and capital models, in coloured circles around the outside.The operation of this framework means that we take a risk-based approach to managing our business, integrating concepts of strategic planning, operations management and internal control. It's made up of 5 components:

Risk culture - is the values, beliefs, knowledge, attitudes and understanding about risk shared by our people. We've embedded this; in fact how we manage risks was the second highest scoring area of our staff survey.

Risk control processes - we have a comprehensive and embedded risk policy framework. This ensures that risks are identified, assessed, controlled and monitored.

Strategic risk management - risk forms a core part of our strategic decision making including Board discussions and approvals. A pro-active, balanced approach enables us to identify opportunities to optimise our risk-adjusted returns to shareholders.

Risk and capital models - the financial crisis showed the importance of having enough capital to cover the risk profile of a business. Our risk and capital models are continually enhanced, to ensure we meet changing regulatory requirements.

Emerging risks - a pro-active approach ensures that our screening process is effective in anticipating future threats and preparing the business for them through taking appropriate actions.