The subsidiaries of the business are required to carry out periodic risk assessments of their business and submit them to the head office. Taking account of risks identified during these reviews and risk assessment processes detailed in the Group’s yearly Corporate Governance statement (available in the Annual Report), this is distilled into an operational “Turnbull risk assessment” that is designed to summarise the key operational risks, how those risks are evolving and how they are being mitigated. The risk assessment is presented to the board on a regular basis.
As part of the process that Brammer has in place to review the effectiveness of the internal control system, there are procedures designed to capture and evaluate failings and weaknesses. In the case of those failings and weaknesses categorised by the board as “significant”, procedures exist to ensure that necessary action is taken to remedy such failings.
A separate exercise is carried out as part of an ongoing review by the board that focuses on corporate risks. These are the strategic group level risks over and above the operational risks which have been reviewed and considered by the Brammer management. This was reviewed by the board in 2012 and adopted. A risk management policy has been formulated along with a board level risk assessment register.
Brammer’s insurance continues to be managed and co-ordinated centrally with the assistance of insurance brokers. This gives the group full visibility of both claims history and the insurance industry’s perception of the group’s overall risk via the respective insurance premiums. Brammer examines the size and trend of these premiums and the extent to which it can mitigate the risks and reduce the overall risk burden in the business by considering the appropriate level of insurance deductible and the potential benefit of self-insurance in some areas.