Terms of Reference of the Risk Committee
15 Jul 2020
These Terms of Reference should be read in conjunction with the Members’ Agreement. In the event of any inconsistency or contradiction, the Members’ Agreement prevails.
1. Delegated Authority
The Risk Committee (“the Committee”) receives delegated authority from the Supervisory Board (“SB”) of PricewaterhouseCoopers LLP. The primary purpose of the Committee is to review, on behalf of the SB, management’s risk framework, assessment and recommendations on enterprise wide risks including financial, operational and reputational risk.
The Committee may investigate any activity within these Terms of Reference and, within its scope of responsibilities, to seek any information it requires and to ensure the attendance of management representatives at meetings as appropriate.
The Committee has the authority to obtain outside legal or independent professional advice. The advisers may attend meetings as necessary and the cost of the advisers shall be borne by the firm.
2. Appointment and Membership
The Chair of the Committee shall be nominated by the Chair of the SB.
The Chair of the SB also selects for nomination three members from the SB population. At least one member of the Committee is required to be a member of the Audit Committee (“AC”). In addition, one member of the Committee is to be an Independent Non-Executive (“INE”) ex officio. The INE shall be determined by the Chair of the Public Interest Body (“PIB”) in collaboration with the Chair of the SB.
SB members who are not members of the Committee may attend meetings where relevant after first liaising with the Committee Chair.
In order to perform their role effectively, each Committee member should obtain an understanding of the detailed responsibilities of Committee membership as well as the PwC business, operations, risks and regulatory environment. The members of the Committee are:
- Kate Wolstenholme, Chair, Partner and SB member
- Andy Key, Partner and SB member
- Zafar Patel, Partner and SB member
- Kenny Wilson, Partner and SB member
- Fiona Kendrick, INE and PIB member (with effect from 1 January 2020)
The secretary to the Committee is Vicki Willis.
3. Attendance of non-members at meetings
Standing attendees shall be the Chief Risk Officer, UK Firm Risk Management Leader and Head of Internal Audit or their delegate subject to agreement in advance of the meeting with the Chair of the Committee.
Other members of management may also be invited to attend meetings.
4. Meetings
The Chair of the Committee determines a rolling programme of ordinary meetings of the Committee which must provide for at least four ordinary meetings in each calendar year. Additional meetings can be called at the request of the Chair of the Committee or Chief Risk Officer.
The Committee keeps minutes of its proceedings and makes these available to the SB, AC, Management Board (“MB”) and the Public Interest Body (“PIB”).
The quorum shall be three members of the SB for any meeting at which the Committee’s delegated powers are to be exercised. In the event of difficulty in achieving a quorum, SB members who are not members of the Committee may be co-opted as members for individual meetings, provided the majority of the quorum are full members of the Committee.
5. Responsibilities of the Committee
A. Risk and risk management
- to review and challenge the enterprise wide risk framework, policies and procedures within the context of the firm’s strategy;
- to receive reports from management and the Chair of the firm's Executive Risk Committee (“ERC”) to enable the Committee to review and challenge the risk register, and once drafted, the risk appetite statement within the context of the firm’s strategy;
- to review and challenge where individual risks exceeds the risk appetite or is a material risk for the firm, including oversight of client acceptance;
- to review the firm’s approach to Audit Quality and Non-Audit Services Quality;
- to receive reports from the Network, and review of output of Network Reviews in the context, especially as they pertain to Audit Quality;
- to review annually the process for monitoring the firm’s compliance with Network Standards;
- to oversee remediation activity as it pertains to quality;
- to review the status, monitoring of and procedures for dealing with troublesome practice matters and the insurance arrangements;
- to review the firm’s procedures concerning the prevention and detection of fraud and financial crime;
- to oversee the effectiveness of the firm’s whistleblowing procedures and report on this to the PIB;
- to review the content of the ERC report in the Annual Report; and
- to review the firm’s arrangements for regulatory compliance and consider any material findings from regulatory reviews, for example:
- to review quarterly reports from Compliance including KPIs to oversee actual versus monitoring plan
- to review quarterly reports from Risk Management focused on risk training breaches and other regulatory breach reporting
- to review and ratify the annual compliance plan with consideration for the annual audit plan
- to review the output of regulatory reports and industry thematic reviews.
B. Other matters
- to review and approve any statement to be made by the UK firm pursuant to the Modern Slavery Act 2015.
Approved: 15th July 2020
