GREAT STRIDES IN ENTERPRISE RISK MANAGEMENT
IT is pleasing to note the great strides forward we have taken with this initiative – Enterprise Risk Management (ERM) - in the past year. The two risk committee meetings held over the past twelve months have shown that the process has become further embedded in the way we are doing business, and continues to add value to our reporting at both country and group level. Mohammed Abdool-Samad, Group Financial Director, commented that “the Group has made significant strides in embedding a risk management culture within the business.”
Of the new initiatives undertaken during the past twelve months, the determination of our risk appetite is probably the most important, as this determines the amount of risk that Illovo is willing to accept in pursuit of the achievement of its agreed strategy and objectives.
At group level, an exercise was done to determine our risk appetite in terms of broad categories, and in respect of our objectives (i.e. where we would like to be) and our tolerance (how low are we prepared to go). This was applied to a broad array of indicators so that each country will be able to see how they stack up against the objective and tolerance, i.e. they comply or they don’t. This will then drive further risk improvement plans as we all strive towards compliance.
Another big initiative undertaken over the past twelve months is Project Totus, a direct result of the Combined Assurance process, which is an integral part of ERM. The need for Project Totus came about through recognising that Illovo was ready for an Integrated Risk Management System which would be developed to a world-class level and assured by a “Super Audit” across all risk disciplines, thereby reducing duplication of effort.
Project Totus was trialed at Sezela in November 2014. Johann van Rooyen (GM: Enterprise Risk & Insurance) noted, “This project will not only reduce the duplication of effort, but also ensure risk and cost reduction with a more balanced business improvement activity. We are excited about the benefits this project will offer and it will support the objective of enhancing the group risk management performance.”
Further information about these two initiatives, risk appetite and Project Totus, will be received from group shortly.