Strategic report Governance Financial statements Other information RISK MANAGEMENT AND THE PRINCIPAL RISKS AND UNCERTAINTIES EVALUATING AND MANAGING RISKS CONTINUED The Group’s Risk Management Framework is The Group regularly reviews and oversees the The Group aims for effective and proactive risk The activities of the Board and Executive designed to manage risk within agreed appetite development of its risk management framework, management integrated into the culture of the Committees are detailed in the Corporate levels and is aligned to delivering the Group’s tools and capabilities. Changes to the framework Group as demonstrated by the Hargreaves Governance report, page 71 to 80. strategy. It applies to all the Legal Entities. The were initiated during the period, including the Lansdown ‘values’ and our commitment to Risk materials are assessed on a regular framework has been in place throughout the introduction of a further level to the Group Risk ensuring positive client outcomes. and rolling basis by the Board and Executive period under review and up to the date of approval Taxonomy and Risk type oversight mechanisms Governance of the risk and control framework Management, with support from second of the Report and Financial Statements and is line as well as planned enhancements to risk strategy Risk management is acknowledged to be a core line functions. Assessments are based on with the UK Corporate Governance Code. and risk appetite frameworks. responsibility of all colleagues at Hargreaves consideration of risk events, changes to Lansdown. processes and controls, assurance work, The oversight of risk and controls management business data, market activity and the is provided by Board committees and the Group regulatory environment. Figure 2: Risk appetite Risk and Compliance functions. Risk Taxonomy During the period the Board has overseen an The Group has an agreed and documented risk Principal Risks upgrading of the governance, systems and taxonomy, which sets out the high-level risk 31 Risks covering controls, skills and capabilities and risk categories to which the business is exposed. all activity at HL management practices across the Group, The control environment is aligned to Level 3 Principal Risks of the taxonomy (see figure 1). Risk Appetite delivered through a formal project. Statements Enhancements will continue to be delivered The broader risk management framework is Strategic during 2021/22. aligned to this taxonomy which is reviewed Risk Appetite Operational A risk policy suite is in place, withpolicies reviewedregularly and forms part of the oversight of the Statements Financial on an annual basis. PLC Board. Investment The risk taxonomy ensures that there is Key governance committees relating specifically completeness in the capture of risks, facilitating KRIs to the maintenance and oversight of the risk and effective aggregation of risk across the broader Risk metrics control environment inlude the plc Board, thec group as well as ensuring that there is consistency Board Risk Committee, Executive Committee of treatment across all risk categories. Key Risk and the Executive Risk Committee. Indicators Risk appetite (KRIs) The plc Board is responsible for overseeing The Group’s risk appetite is an articulation of the the Audit, Risk, Remuneration and Nomination nature and type of risks that the Group is willing Committees. to accept, or wants to avoid, in order to achieve During the period, the governance structure has its business objectives and strategy. evolved reflecting the continued growth of the business. Detail of the governance structure is included in the Corporate Governance section of the report. 51 Hargreaves Lansdown Report and Financial Statements 2021