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SUN INTERNATIONAL ANNUAL REPORT ’10
RISK MANAGEMENT, ACCOUNTABILITY AND AUDIT
Risk management
112
CORPORATE GOVERNANCE REPORT CONTINUED
The board has adopted the following risk management policy. Through a
process of communication and application to all business units this policy
has been successfully embedded throughout the group:
‘The directors of Sun International Limited have committed the
company to a process of risk management that is aligned to
the principles of the King III code. The features of this process
are outlined in the company’s Risk Policy Framework. All group
business units, divisions and processes are subject to the Risk
Policy Framework.
Effective risk management is imperative to a company with our
risk profile. The realisation of our business strategy depends on
our being able to take calculated risks in a way that does not
jeopardise the direct interests of stakeholders. Sound management
of risk enables us to anticipate and respond to changes in our
business environment, as well as take informed decisions under
conditions of uncertainty.
An enterprise-wide approach to risk management has been
adopted by the company, which means that every key risk in
each part of the group is included in a structured and systematic
process of risk identification and management. All key risks are
managed within a unitary framework that is aligned to the
company’s corporate governance responsibilities.
Risk management processes are embedded in our business
systems and processes, so that our responses to risk remain
current and dynamic. All key risks associated with major change
and significant actions by the company also fall within the
processes of risk management. The nature of our risk profile
demands that Sun International adopts a prudent approach
to corporate risk, and our decisions around risk tolerance and
risk mitigation reflect this. Nonetheless it is not the intention to
slow down the group’s growth with inappropriate bureaucracy.
Controls and risk interventions are chosen on the basis that
they increase the likelihood that we will fulfil our intentions to
stakeholders.
Every employee has a part to play in this important endeavour
and we look forward to continuing to work with you in achieving
these aims.’
The group pursues strategies aimed at maximising long term shareholder
value taking cognisance of the need for sustainable business practices.
The risks to which the group’s existing businesses are exposed are
continuously identified and mitigated in terms of a group process that
allocates responsibility, determines the action to be taken and monitors
compliance with that action. This involves managing existing businesses
in a dynamically changing and challenging environment as well as pursuing
new business opportunities locally and internationally. Any new business
opportunity which exposes the group to risk results in a risk analysis being
carried out by management as a pre-requisite to board consideration and
approval. This ensures the overall level of risk is assessed in relation to
the potential returns.
The board is responsible for monitoring and reviewing the risk management
strategy of the group and remains committed to the group’s process of
enterprise risk management. The group risk committee assists the board
in fulfilling this responsibility and in the discharge of its duties relating to
corporate accountability and associated risk in terms of management,
assurance and reporting. The effectiveness, quality, integrity and reliability
of the group’s risk management processes have been delegated to the
risk committee, whose primary objective is to monitor, develop and
communicate the processes for managing risks across the group.
During the year, the company’s risk register comprising the top 42 risks
was updated and each risk reviewed, re-ranked and documented. The
review process also explored the possibility of new risks having entered
the risk environment, and these were defined and ranked in the same
way as existing risks. The register continues to be updated on an annual
basis, or as often as circumstances necessitate. Ownership of each risk
remains the responsibility of assigned senior executives, who report on
progress made with agreed action plans and existing internal controls.
The identified risks are monitored by the SIML board on a quarterly basis.
The SIML board submits a risk management report to the risk committee
twice a year focusing on the top 20 risks. Each division drafts a risk
management submission to the SIML board quarterly, focusing on the top
10 risks facing the division. Divisional risk management committees and
operational risk management committees at each unit review their risks
at their risk committee meetings once a quarter and minute any risk
developments and losses ensuring that mitigating actions are being
pursued. This structure is depicted alongside.