SECTION 1: BRC COMPOSITION

Section 1: BRC Composition | 7 1.2.8 After deciding on the question of governance structure for primary risk oversight, the Board should consider whether there is a need for additional specialised Risk Committees at the Board level, to focus on particular key risks such as information and communications technology, safety and health, or sustainability. For example, Boards of companies in which the use of information technology (IT) is core or pervasive may choose to have a focused IT Governance Committee to review and monitor both the business opportunities, as well as risks and cyber threats arising from IT. Similarly, for companies in which the workforce is subject to significant safety and health risks with accompanying and strict regulations, a Safety and Health Committee can ensure that the Board is alert to this critical area of exposure. In addition, some companies which have sufficient resources and desire to ensure adequate focus at the Board Committee level regarding the long-term sustainability considerations on strategy and stakeholder engagement may decide to establish a Sustainability Committee 4 . Companies that have an existing Safety andHealthCommitteemay choose to expand its responsibilities to include wider sustainability concerns, instead of setting up a separate Sustainability Committee. Safety and health often fall under the umbrella of a company’s material environmental, social and governance (ESG) factors. Where specialised Risk Committees exist, they are usually in addition to a BRC. Appendix 1D provides an illustration of the different Board and Board Committee structures (including a Board with additional specialised Risk Committees at the Board level). 4 MR 711A and 711B, and CR 711A and 711B require all listed companies to report annually on their sustainability policies, practices and performance on a “comply or explain” basis. MR Practice Note 7.6 and CR Practice Note 7F provide guidance on this and stipulate a “Board Statement” as one of the components. Sustainability reporting is further covered in Section 5.11 of this Guide. 1A-2 1D 1A-3 1A-4