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BUSINESS MODEL
AND STRATEGIC
OBJECTIVES
LEADERSHIP
GOVERNANCE
SHAREHOLDERS’
INFORMATION AND
ADMINISTRATION
OPERATING
PERFORMANCE
FINANCIAL
PERFORMANCE
BLUE LABEL INTEGRATED ANNUAL REPORT 2014
49
GOVERNANCE
OF RISK
STRUCTURE
The Board accepts its responsibility for the
governance of risk, which includes the total process
of risk management and the forming of its opinion on
the effectiveness of the process. The Board forms its
opinion on the process of risk management based on
the recommendations of the ARCC and is satisfied
with the effectiveness of the risk management
process. The ARCC is responsible for ensuring that
the Group has implemented an effective policy and
plan for risk management and that the risk disclosures
are comprehensive, timely and relevant. The Board
and committees’ responsibilities are documented in
the Blue Label Enterprise Risk Management
Framework Policy.
Management is accountable to the Board for
designing, implementing and monitoring the process
of risk management. The IRCC, established by
management, supports the enterprise-wide risk
approach by identifying, evaluating and measuring
Group-wide risks and compliance in all functional
areas of the Group, as well as maintaining adequate
internal controls. The IRCC reports to the ARCC
bi-annually.
PROCESS
Group-wide strategic risk assessments are conducted
bi-annually. These assessments are facilitated by
internal audit which plays an important role in
evaluating the risk management process and guiding
management to continuing improvement. Internal
audit does not take any direct responsibility for
making risk management decisions or managing the
risk management function. The outcome of the risk
assessments is integral in developing a plan for audit
engagements for the forthcoming year. The risk
assessments conducted involve risk identification and
prioritisation at subsidiary and holding company level,
followed by interviews with Senior Management at
subsidiary level and key members of executive
management to confirm risks, their descriptions and
prioritisation. Each risk is evaluated in terms of
potential impact, likelihood of occurrence and the
perceived effectiveness of controls in place to manage
the risks according to set criteria. The Group’s
material risks are listed on pages 14 to 18.
A risk appetite and tolerance framework has been
developed in line with the principles of King III and the
framework was presented to the ARCC for
consideration and has been approved/noted by the
Board. In terms of the framework, priority risks will be
considered in terms of risk appetite, which is defined
as how much risk the Group is prepared to take in
pursuit of its objectives. The Group has identified its
strategic risks and acknowledges that its appetite to
accept risk varies across these risks. The ARCC has
elected to set risk tolerances in respect of each of the
prioritised risks. This framework is refined during each
reporting period.