Risk Management Framework
For British Land, effective risk management is fundamental to how we do business. Our ability to identify, assess and effectively manage current and emerging risks is critical to our strategy and how we position the business to create value, whilst delivering positive outcomes for all our stakeholders on a long term sustainable basis.
British Land's risk management and internal control framework is centred on being risk aware. We clearly define our risk appetite, respond quickly to changes in our risk profile and foster a strong risk management culture amongst all employees, with defined roles and responsibilities. It integrates a top-down strategic view with a complementary bottom-up operational process (as outlined in the diagram below). Our approach is not intended to eliminate risk entirely, but instead to manage our risk exposures within our appetite for each risk, whilst at the same time maximising opportunities.
The Board has overall responsibility for risk management and maintaining a robust internal control framework. To support the Board, the Audit Committee and ESG Committee provide essential oversight and assurance. The Audit Committee specifically reviews the effectiveness of risk management and internal control processes throughout the year.
Through the below approach, the Group operates a ‘three lines of defence’ model of risk management with operational management forming the first line, the Risk Committee and internal control team the second line and finally internal audit as the third line of defence.
Our Risk Appetite
Our risk appetite is at the core of our risk management approach, guiding our business planning, decision making and strategy execution. The Group’s risk appetite is reviewed annually as part of the strategy review process, and approved by the Board, and is embedded within our policies, procedures and internal controls. Whilst our risk appetite may vary over time and during the course of the property cycle, we maintain a balanced approach to achieve long term sustainable value.
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Our principal risks
Our principal risks comprise the eleven most significant Group risks, including four external risks primarily influenced by market factors, and seven internal strategic and operational risks which, while subject to external influence, are more under the control of management. External principal risks relate to the macroeconomic and political environment and our key markets, whereas internal principal risks relate to capital allocation, development, customers, sustainability, people and culture, as well as key operational risks such as technology, health and safety, and key controls including fraud and compliance.
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Our priorities for 2024/25
Continue to monitor the ongoing impact of macroeconomic and geopolitical uncertainties on our risk profile.
Monitor emerging risks trends, evaluating their evolving impact on the business as well as to identify opportunities. Specifically, focus on AI and emerging technologies, as we integrate these across our operations, tracking the impact on relevant principal risk categories.
Enhance the maturity of our environmental and social sustainability control environment to align with evolving requirements and standards.
Provide training to enhance risk awareness across our business and foster a risk aware culture.
Refine business continuity plans for critical business operations.
Full details on our approach to risk are outlined in our Annual Report