Risk appetite framework
The Board is responsible for determining the nature and extent of the risks it is willing to take in achieving our strategic objectives. Our Group risk appetite statement sets the tone from the top and supports decision making. The risk appetite framework provides qualitative and quantitative insight on risks and supports proactive mitigation planning.
Rotork’s Purpose, ‘Keeping the world flowing for future generations’, is embedded in the way we assess risks. We are committed to generating stakeholder value through innovation and sustainable growth and will only take considered risks that fulfil our strategic objectives and do not risk our Values, financial stability or our resilience. We use the three pillars of our sustainability framework – Operating Responsibly, Enabling a Sustainable Future, and Making a Positive Social Impact to guide our decision making and drive our success.
During 2021, the Board reviewed and updated the risk appetite framework to reflect changes to the nature of Rotork’s business and our operating environment, including responses to the risks associated with sustainability, supply chain disruption and COVID-19. The risk appetite framework consists of the following steps:
- Review and update the risk appetite preferences
- Identify key decisions
- Evaluate decisions against risk appetite
- Review key risk indicators
The following are considered the principal risks facing the Group and are the result of the robust, top down and bottom up risk assessment process previously described. It includes those risks that would threaten the Group's business model, future performance, solvency or liquidity.