Risk management framework
The Executive Directors are heavily involved in the day-to-day running of the business. Risks are discussed on a daily basis as part of decision making on projects. This regular consideration of risks allows management to respond quickly to changes in circumstances.
The Executive Directors set criteria in a range of areas for the Senior Management to report back on: legal, sales and marketing, planning, environmental, construction and financial. Senior Management carry out their due diligence on these aspects for each site. This frequently involves the engagement of external consultants, such as planning consultants, who use their specialist knowledge and outside perspective to challenge our assumptions and ensure that we have a full understanding of the site and its market. From assessing all the information in the reports from Senior Management, Executive Directors can determine the risks present for each site, which informs their decision-making.
While the Executive Directors have some autonomy, full Board approval is required for certain actions, such as the acquisition of land over a set value. The Non-Executive Directors challenge the Executive Directors to ensure that the level of risk being taken is appropriate.
The Audit Committee support the Board in ensuring that the financial performance of the Group is properly reported and monitored. The Audit Committee work closely with external auditors to do this. The auditors produce reports on the control environment and financial statements, which are reviewed by the Audit Committee.
Exit of the United Kingdom from the European Union
On 23 June 2016, the United Kingdom had a referendum in which the public voted to leave the European Union.
The housing market has emerged relatively unscathed after the hysteria that was created prior to the referendum if the UK decided to vote to leave the European Union. There is still uncertainty within the UK economy and it is too early to confirm the impact of the departure. However, the long term underlying demand for new homes is very strong and the government has stated that it will be supporting the housing market with relevant initiatives.