Independent Director — Board Risk Committee Member

Committee remit

Contribute to oversight of risk appetite, portfolio limits, concentrations and stress testing. Challenge how exposures are aggregated and how management evaluates risks that are correlated through commodities, regions, logistics routes or connected counterparties. Review the effectiveness of escalation when limits are exceeded or information becomes unreliable.

The committee should examine how exceptions accumulate across the portfolio. Individually modest departures from policy can create significant exposure when they share a common cause or counterparty relationship. Ask whether management distinguishes temporary approval from a permanent change in appetite and whether repeat exceptions trigger policy review. Stress reporting should show the effect on both losses and liquidity, including additional funding needed to hold or realise collateral. This helps the board evaluate whether the business can manage the consequences of its risk-taking.

The connection to capital and liquidity

Ask whether the portfolio can absorb adverse outcomes without relying on rapid collateral realisation or uncommitted funding. Examine the relationship between expected returns, loss assumptions and operational capacity to administer complex transactions. Risk reporting should make these dependencies visible to the full board.

A committee contribution with clear boundaries

The director should help prioritise assurance and track remediation of material findings. Management retains responsibility for underwriting and portfolio administration within delegated authority. Independence, conflicts and any applicable appointment requirements must be assessed for the seat.

Candidates should present an anonymised example of a risk metric that looked satisfactory while a material exposure was building. Effective service means the committee asks earlier, more consequential questions and obtains evidence that changes decisions when warranted.