Annual Report 2010 - SBM Offshore

Report of the Board of Management
Risk Management
Introduction
The Company has progressed in developing its
Corporate Governance systems mainly based on the
COSO II Enterprise Risk Management model as well
as developments in ISO 31000. The Internal Audit team
has been strengthened again in 2010 to meet
the increased audit requirements.
The objective of efficient and effective control of all
business and support activities has been raised by
Management to the level of a strategic priority. This
is best achieved by ensuring that responsibility and
accountability are delegated to the business managers
who are also responsible to develop, document and
demonstrate effective business processes and controls.
Company Management review and approve the
processes and controls to ensure their adequacy. This
is however a long term programme and improvements
will be sought on a continual basis.
Company Risk Management Cube
Strategy
Internal environment
Objectives
Risk Management
Controls
Information systems
Internal assurance
Operations
Reporting
86 SBM Offshore – Annual Report 2010
Compliance
Support services
Production operations
Project execution
Marketing sales
This cube has been developed from the COSO
Enterprise Risk Management model to represent the
scope of Corporate Governance as it applies to SBM
Offshore.
As put forth by COSO (www.coso.org), the front face
lists the Activities that go on in the Group to maintain
and improve Corporate Governance. The top recalls
the categories of Commitments that the Group has
towards its stakeholders. The right hand side reflects
the Organisational Levels of the Group; we call these
the Business Operating Areas. Of course, these should
not be considered simply as faces but as seams that
run through the 3D model.
Internal environment
The continued growth of the Company requires
Management to support the development of an integrated
control environment. Particular attention has
been given to the internal environment by raising the
profile and importance of risk management, process
control effectiveness and compliance. Continued
emphasis is being applied to improve role definitions,
responsibility and accountability and training. Employee
assessments and rewards include compliance as a
criterion affecting remuneration incentives. Objectives,
performance measurement and reporting are all
areas where Management has started a concerted
and explicit effort to improve and these programs are
communicated within the Company to encourage
compliance.
Objectives
The Company’s objectives are translated down to the
individual level in the organisation to ensure alignment
and provide reasonable assurance that the
overall Company objectives will be met. Performance
is measured against set objectives and specific
actions are undertaken to correct deficiencies or failures
to meet objectives where appropriate. In 2010,
focus was placed on revising the Company Group
Management System (GMS) processes to more
explicitly demonstrate how Company objectives are
cascaded down to detailed activities. This effort will
be pursued through 2011.