We focus on key risks which could impact on the achievement of our strategic goals and therefore on the performance of our business. Risks are considered at every level of the business including when approving decisions, transactions and monitoring performance.
We have a structure in place to capture, document and manage risk in line with our size and business model. The close working relationship between the Executive Directors, senior management and other team members enhances the ability to efficiently capture, communicate and action any risk issues identified.
Our Risk Committee co-ordinates risk management activities throughout the Group and reports to the Board and Audit Committee where appropriate. The Risk Committee comprises the Chief Executive Officer, the Operations Director and Company Secretary, alongside certain senior managers and representatives from across the Company. The Risk Committee engages with staff throughout the business and our small size helps to ensure a close relationship between each business area. In addition, frequent visits by head office staff to our business centres help to ensure awareness and understanding of any property-specific risks and issues.
Overall, we review risks in two strands:
1. Strategic Risks:
These are identified, assessed and managed by the Executive Committee on behalf of the Main Board. These risks are reviewed at Board level to ensure they are valid and relate to the current strategic direction and objectives of the Group. Details of our strategic risks and the mitigating activities in place to reduce these risks are set out on the following pages. The Board is satisfied that we continue to operate within our desired risk appetite.
2. Operational Risks:
These are identified, assessed and managed by the Executive Committee. These risks cover all areas of the business, such as Finance, Operations, Investment and Development. Day-to-day operational risks are closely reviewed and managed by the Executive Committee and senior management, with information being reported to the Board and Audit Committee as appropriate.
Risk registers for all areas are maintained and risks are assessed against a defined scoring mechanism to ensure consistency. High-rated risks identified in the registers are regularly reviewed by the Board, Audit and Executive Committees.