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Management Risk Committee Charter

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37 views3 pages

Management Risk Committee Charter

Uploaded by

Fizzazubair rana
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

MANAGEMENT RISK COMMITTEE

A. Forming Authority

The Management Risk Committee (MRC) is established by the authority of the Managing
Director (MD).

 Appointment of Members: Members are appointed by the MD based on their


expertise in risk management and their capacity to contribute effectively to the
committee's objectives.

B. Composition of the Committee

 Chairperson: The senior-most member present at the meeting will chair that meeting.
If the senior-most member is unavailable, the committee will select a chairperson for
that meeting.
 Secretary: The GM (Risk Management) will serve as the secretary for this
committee.
 Members:
1. Deputy Managing Director (Operations)
2. Deputy Managing Director (Services)
3. Chief Financial Officer
4. Senior General Manager (Business Development)
5. Senior General Manager (Human Resources)
6. General Manager (Risk Management)
 External Experts: External experts or advisors may be included to provide
independent perspectives on risk matters.

C. Authority

 The committee will report to the Managing Director on a quarterly basis, including
summaries of activities, key findings, and recommendations.
 The committee has direct access to the Board of Directors if necessary.
 Line management shall remain primarily responsible for risk management. Committee
members' roles extend beyond their respective departments and align with the TORs
of the committee.
 The committee will be supported and facilitated by the GM (Risk Management).

D. Objective

The core functions of the MRC are to:


 Review and ensure implementation of the company’s Enterprise Risk Management
Framework.
 Review the company’s strategic/significant risks and risk appetite in pursuit of the
Corporate Strategy.
 Formulate Management’s recommendations to the Board on the company’s
significant risks and mitigation strategies.

The functions of the committee also include to:

1. Review high-risk policy-related agenda items to be put forward to the Risk


Management Committee (RMC) of the Board of Directors.
2. Recommend risk appetite and tolerance levels for the company’s significant risks,
providing guidelines for their determination and communication.
3. Oversee recommendations from the Risk Management department on risk ownership
awareness at operational levels, ensuring risk management is integrated into the
company’s culture, operations, activities, and decision-making.
4. Monitor internal and external risk trends and concentrations, specifying sources of
information and monitoring tools.
5. Monitor high and extreme risks identified in departmental risk registers.
6. Review and approve the report included in the Company’s Annual Financial
Statements related to “Risk and Opportunity” and major risks and challenges
highlighted in the Director’s Report.
7. Review the adequacy and appropriateness of the company’s risk management
controls, framework, and processes, considering the company’s requirements and best
practices.
8. Review risks and control gaps identified in policies and procedures by the risk
management department.
9. Review and recommend changes in operational manuals of departments to the
approving authority (MC/MD).
10. Review the assignment of responsibility and accountability for risk management at
appropriate levels within the company.

E. Meetings

 Frequency:
o Meetings are to be held as needed, initiated by the GM (Risk Management).
o At least one meeting per month is required.
o Define a minimum of 12 and a maximum of 24 meetings per year to ensure
regular oversight without overburdening the committee.
o Provisions for extraordinary meetings in case of sudden or unexpected risk
events.
 Quorum:
o At least 60% of members must be present.
o The quorum must include at least one member from each key functional area.
 Agenda:
o GM (Risk Management) shall propose agenda items at least three days before
the meeting using a standardized format to ensure consistency and
thoroughness.
o Urgent matters may be tabled during the meeting with the chairperson’s
permission.
 Minutes of Meeting:
o Minutes will be prepared by the GM (Risk Management) and circulated to all
committee members within seven days of the meeting.
o Minutes shall be approved in the next committee meeting.
o Approved minutes will be submitted to the Managing Director.
o A process will be introduced for tracking action items and decisions from
previous meetings.

F. Performance Evaluation

 Periodic Evaluation: A section on periodic evaluation of the committee's


performance will be introduced, including an annual review to ensure the committee
is fulfilling its mandate effectively.

G. Training and Development

 Ongoing Training: Provisions will be included for ongoing training and development
of committee members to keep them informed about the latest risk management
trends and best practices.

H. Confidentiality and Conflict of Interest

 Confidentiality: Clauses will be introduced to maintain the confidentiality of


sensitive information.
 Conflict of Interest: Clauses will be included to manage conflicts of interest among
committee members.

Common questions

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Provisions include ongoing training and development for MRC members to keep them informed about the latest risk management trends and best practices, ensuring they remain effective in their roles .

Clauses are included to manage conflicts of interest among committee members, ensuring that any such issues are identified and addressed appropriately, maintaining the integrity of the committee's operations .

A process is introduced for tracking action items and decisions from previous meetings, which is significant as it helps in ensuring that decisions are implemented and follow-up actions are completed. This aids in accountability and the continuous improvement of risk management practices .

The MRC oversees recommendations from the Risk Management department to ensure risk management is integrated into the company’s culture, operations, and decision-making. This involves reviewing risks and control gaps identified in policies and procedures, monitoring internal and external risk trends, and ensuring awareness at operational levels .

The core objectives of the MRC include reviewing and ensuring implementation of the Enterprise Risk Management Framework, assessing the company’s significant risks in pursuit of the Corporate Strategy, and formulating management’s risk-related recommendations to the Board. These align with the strategic goals by maintaining a robust risk management system that supports the corporate strategy .

The MRC reviews and approves the report included in the company’s Annual Financial Statements related to 'Risk and Opportunity' and major risks and challenges highlighted in the Director's Report. This contribution ensures transparency and comprehensive reporting of the company's risk profile .

The chairperson for each MRC meeting is the senior-most member present. If the senior-most member is unavailable, the committee selects a chairperson for that meeting . Members are appointed by the Managing Director based on their expertise in risk management and their capacity to contribute effectively .

The MRC maintains accountability and transparency by preparing and circulating meeting minutes, which are approved at the next meeting and submitted to the Managing Director . Additionally, a process for tracking action items and decisions from previous meetings is introduced, and the committee's performance is periodically evaluated .

The MRC may include external experts or advisors to provide independent perspectives on risk matters, which helps in broadening the scope and depth of risk assessments .

Meetings are initiated by the GM (Risk Management) and held at least once a month, with a minimum of 12 and a maximum of 24 meetings per year . A quorum requires at least 60% of members present, including one member from each key functional area .

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