Membership of the Group Risk Committee currently comprises four non-executive directors, the Chairman of the Audit Committee and myself as Chairman. The Committee invites the Group Chief Executive, Group Chief Financial Officer, Group Chief Risk Officer, Group Chief Internal Auditor and representatives of the external auditors, PricewaterhouseCoopers LLP, to attend all of its meetings, although it reserves the right to request that they withdraw at any time during the meeting. Other senior management are invited to present reports as required by the Committee to discharge its duties.

During 2010, the role of the Board in risk governance was the subject of much commentary. The Board closely monitored developments in this area and in line with best practice, the Group Risk Committee is chaired by a non-executive director and its membership comprises independent non-executive directors. The newly comprised Group Risk Committee met for the first time in 2010. The Committee’s role is to provide guidance to the Board on the Group’s risk management policies and procedures and advice on acceptable risk taking in order to assist the Board in discharging its responsibility for setting the risk appetite for the Group. In July 2010, in line with the recommendations of the Walker review, the Board appointed Andrea Blance as Group Chief Risk Officer to report, and have unfettered access, to the Committee. The Committee must approve the appointment or removal of the Group Chief Risk Officer.

The Committee met three times during 2010. The Committee operates under formal terms of reference and these are reviewed annually. The Chairman of the Committee reports back to the Board on the outcome of meetings, and the Board receives the minutes of all Committee meetings.