SECTION 1: BRC COMPOSITION

Section 1: BRC Composition | 5 • Board drivers . The existing size, structure and composition of the Board and Board Committees will influence whether or how BRCs are formed. The Board should consider the overall effectiveness and efficiency of the governance structure, so as to avoid duplication of efforts and/or gaps in responsibilities and communications between the Board and Board Committees. 1.2.6 At the first level, the Board needs to decide where primary responsibility for risk oversight resides within the Board. In practice, there are four options: • Oversight by the Board .There is no delegation of responsibility of risk oversight to a Board Committee. In this case, the full Board needs to undertake the activities that are typically carried out by a BRC. • Oversight by the Audit and Risk Committee (ARC) . Here, the Board delegates oversight of the risk management and internal control framework to the Audit Committee (AC). Under these circumstances, the AC is commonly referred to as the Audit and Risk Committee (ARC). Specific guidance for this scenario is found in the AC Guide. • Oversight by the BRC . The Board delegates oversight for risk management to a separate BRC. This BRC Guide provides specific guidance for this option. • Oversight by the BRC and other specialist Risk Committees . The Board delegates oversight for risk management to a separate BRC. However, where there are areas of significant risks, the Board may require support from additional specialist Risk Committees to provide more focus and oversight. An illustration of the different Board and Board Committees structures is provided in Appendix 1D. 1D