Strategic Report Principal Risks continued
Brexit A new trading agreement was put in place with the EU at the end of 2020, ahead of the end of the transition arrangement, removingmuch of the uncertainty around this event. Emerging risks During the year the Board has considered themes where emerging risks or disrupting events may impact the business. These may rise from behavioural changes, political or regulatory changes, advances in technology, environmental factors, economic conditions or demographic changes. Some are already considered to be principal risks in their own right such as the impact of climate change, while others are reviewed as part of the ongoing risk management process. The principal emerging risks have been identified to be: ӱ the impact of climate change; ӱ the ongoing effects of the Covid-19 pandemic on the economy and the property market, and potential legacy impacts on unemployment, inflation and Government borrowing; ӱ potential changes in the office market as businesses re-assess their needs in the light of flexible working; ӱ structural changes in the retail market, with the increasing prevalence of online retailing and the oversupply of physical space; ӱ the impact of technology giving rise to rapid changes in occupiers’ businesses, and consequently on their space requirements; ӱ legislative and regulatory changes can bring risks to the commercial property market, such as changes to planning regulations or in the application of business rates. These emerging risks are covered in more detail in the Marketplace section of the Report. Read more on pages 16 - 17
Riskmanagement framework
Board • Has overall responsibility for risk management • Determines business model • Considers risk appetite
Executive Committee • Implements strategy and risk policy • Identifies and assesses risks • Carries out risk mitigation
Audit and Risk Committee • Recommends risk management policy • Reviews internal controls • Reviews detailed risk matrix • Considers principal and emerging risks
Management Committees • Review specific transaction risks • Consider forthcoming legislation • Review operational risk
The matrix below illustrates the assessment of the impact and likelihood of each of the principal risks.
2
5
8
4
11
1
7
6
3
10
9
0
Low
Medium
High
Likelihood after mitigation
Read more on pages 49-51
48
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