INTEGRATED

MANAGING RISK
MANAGING RISK
The Board is responsible for oversight of the risk management process and is assisted in
its responsibilities by the audit and risk committee, together with external consultants. The
day-to-day responsibilities for risk management, and the design and implementation of
appropriate processes to manage risk, reside with management.
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STRIKING THE BALANCE
We remain committed to our
strategy to diversify our assets
The audit and risk committee approves the risk strategy
and the policies that are formulated and implemented by
the executive committee and senior management. This
system assists the Board in discharging its responsibility
for ensuring that the wide range of risks associated with
the Group’s operations are managed effectively in support
of the creation and preservation of stakeholder wealth and
well-being.
The outsourced internal audit function plays a pivotal role in
providing assurance to the Board on the effectiveness of the
risk management process. Where weaknesses are identified,
these are addressed as part of the continual improvement
of the risk management process and assurance framework.
Risks identified as material are reported to the executive
committee and senior management where they are reviewed
as part of the risk management escalation process.
The Board, in conducting its annual review of the effectiveness
of risk management, considers the key findings from the
ongoing monitoring and reporting process, management
assertions and assurance framework. Both internal and
external audit reports are reviewed by the Board on a
quarterly basis.
APPROACH
The management of risk is critical to the success of the
Company, given its exposure to a wide variety of risks which
could have a financial, operational and/or reputational
impact on the Group. Effective management of risk supports
the delivery of Village’s strategic objectives.
The approach to the management of risk relies on the
following key actions:
• identifying the key strategic risks that could have a
significant impact on the ability of the Group to achieve
its strategic objectives;
• assessing the impact and likelihood of these risks;
• ensuring that appropriate controls and responses are put
in place to mitigate identified risks;
• monitoring the effectiveness and implementation of
controls; and
• reporting regularly to the executive committee, the audit
and risk committee and the Board of directors.
Risks identified
The executive committee has engaged the services of
an external consultant to assist with the identification of
the strategic risks of Village. This was facilitated through
a number of risk assessment workshops where strategic
risks to be mitigated and controlled were identified at both
operational and Company level.
The table below was used to categorise the inherent risk exposure of the identified risks into five different categories:
CATEGORY CATEGORY DESCRIPTION FACTOR
Extreme This risk should be terminated/insured/controlled 50 +
High This risk should be insured/controlled 35 – 50
Moderate This risk will typically be controlled (treated) 25 – 35
Low
Management will make an informed decision as to whether this risk must be
controlled or absorbed by Village. The decision will be based on a ‘cost vs.
15 – 25
benefit’ approach
Insignificant
Impact and probability is insignificant. This risk may be tolerated, and cost of losses
will be absorbed by the Company
1 – 15
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INTEGRATED ANNUAL REPORT 2013
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