corporate governance
risk management
The board regards risk management as a key business discipline which:
- Balances risk and reward within both existing and new initiatives; and
- protects the group against uncertainties and hazards, which could prevent the achievement of business objectives.
The board is responsible for the risk management process and is assisted in its responsibilities by the risk committee. The day-to-day responsibility for identifying, evaluating and managing risks resides with management.
The risk management process set out below is dynamic and is designed to ensure that management:
- Identifies emerging risks and updates the key risk profile on a regular basis;
- appropriately prioritises the key risks based on their inherent impact and likelihood of occurrence;
- continuously improves the control framework in place to manage the key risks in line with the board’s risk appetite;
- monitors the ongoing risk exposure by reviewing objective metrics, performing control self-assessments and reviewing the reports of independent assurance providers; and
- responds timeously to any significant changes in risk exposure.
The key inherent risk profile sets out the top risks for the group and includes strategic, business, financial and external risks. This risk profile is reviewed and updated by the executive directors throughout the year and is formally revised on an annual basis. The status of the key risks and the management thereof is reported to and discussed at the risk committee on a quarterly basis.
An operational risk report setting out progress in business continuity, occupational health and safety, crime prevention and detection and providing an update on legal compliance is also reported to the risk committee quarterly.
Risk management has become a standard business discipline and is applied consistently throughout the group. The risk management process is integrated with strategic and business planning and is embedded through the management reporting and performance management system.
In the current challenging retail trading conditions within South Africa, the board has recognised the importance of an effective risk management process. During the year there has been a focus on continuing to improve the risk management process, specifically for the key inherent risks. This has resulted in:
- A review to ensure that appropriate measurements and targets are in place for each of the key risks;
- an improvement in risk management reporting to ensure that detailed action plans and deadlines are set out for each key risk. In addition, the divisional directors are required to attend and present their action plans at the risk committee meeting; and
- a review of the talent in place to manage certain of our key risk areas. This has resulted in the appointment of new talent into certain key positions.