Risk and opportunities – managing impacts and relationships? Implats Platinum Basic Materials South Africa 2010 Integrated Annual Report I N T E G R AT E D A N N U A L R E P O R T 2 0 1 0 Group overview Group overview Management approach continued Strategic risk Accountability An integral part of managing businessbased on contextualising, At Implats, our approach to risk is sustainability is to have a clear understanding ofrisk within a broader understanding identifying and managing non-financial performance indicators that have a direct impact on a standard process of of our objectives and by following the bottom line. For Implats, as with the broader industry, the business case for sustainability has been largely directed by • Skills – ensuring the retention of scarce skills pertinent objective-based risk assessment to identify and evaluate to meeting our the Group. risks across growth objectives These issues of materiality are encapsulated in our strategic performance areas (page 43), which are not BOARD Audit and risk Remuneration Transformation SHEQ Nominations compliance with requirements. While acknowledging that mining industry Who are our stakeholders, what are their objectives and how shall we involve them? legislation and seen in isolation miningCommunicate and consult but form an integral part in industry understanding the business imperatives that drive the bottom line. We believe that unless we manage these material issues within the context of our strategic Group overview EXCOM Group executive committees requirements vary by sector, we are steadily crystallising the material sustainability issues for Implats. This requires a long-term the context view of fundamentals, based on sound risks business principles, as opposed to short-term remedies. and what are our Identifying material issues has been How, when and aligned with the risk Operational committees Transformation Operational Committee Operational/community forums Operational SHEQ Committees Sustainable Development Committees Establish Identify the What might happen? why? Analyse the Evaluate the Treat the risks performance areas, we will fail to meet our strategic risks risks How should we What this will mean Which risks need section of for our objectives? this integrated report. treating and our priority for attention them? Operational committees Group executive committees Operations, people, nance, growth Group Sustainable Development Forum Group Management Transformation Committee Risk Committee Treasury Committee What do we need to take into account objectives? objectives. Each aspect is dealt with in thedeal with respective best management discipline and is an ongoing process which will culminate in better understanding of these issues. Monitor Our risk assessment process follows five key steps: understanding the context, identifying the risk, analysing plans. Through the risk department, each discipline undergoes a detailed risk analysis which is reviewed • Establishing the context includes determining key annually. This is discussed more fully on page 42 which objectives, key stakeholders and their interests, and sets out our strategic risk issues. considering all external and internal factors (from cultural SOURCE BASED ON: ISO 31000: 2009, RISK MANAGEMENT – PRINCIPLES the risk, evaluating its impact and implementing mitigation Have the risks and controls changed? AND and review GUIDELINES, GENEVA: INTERNATIONAL STANDARDS ORGANISATION, 2009 Performance overview Our management approach is based on accountability, beginning at operational level and culminating at Board level. Operational committees are tasked with implementing strategic imperatives to meet set objectives, while executive committees monitor progress against these imperatives as well as compliance. They are the primary facilitators in ensuring the sustainability of the business in its quest to achieve its goals. Sustainability objectives are included in the key performance indicators of senior management, against which performance is measured and remunerated. The roles and responsibilities of Board committees are discussed under governance, pages 136 to 138. The Sustainable Development Committee is charged with overseeing the overall performance of the Group’s key non-financial indicators and supporting Board committees, such as the SHEQ, Transformation and Audit and Risk Committees. The Committee oversees performance against compliance indicators while continuing to ensure the implementation of strategic performance objectives. Through the Executive Committee, performance is reviewed in line with the strategies employed. This Committee also advises the Board committees which, in turn, provide oversight and give input to the review of strategic imperatives to ensure relevance in the pursuit of organisational objectives. Managing sustainability does not take place in isolation, but is influenced by and considers the primary stakeholders in our business, such as unions, which are represented in the management structures of operational committees and have set agreements in place. Equally, Implats actively participates in external initiatives related to its industry, for example the Group served on the government task team reviewing the mining charter in 2009 and contributed to policy development. Through other stakeholder groups, Implats has been involved in the sustainable development committee of the mining, minerals and development board of the DMR in providing input to the department’s strategic focus on sustainability issues. culminating with the Board Audit and Risk Committee and the Board. The Board has ultimate responsibility for establishing a framework for internal controls, including appropriate risk management and good corporate governance frameworks and systems. Implats has established key controls that focus on critical risk areas identified by line management, facilitated by risk management, assessed and evaluated by the internal audit function. Every critical risk and control, as well as any associated tasks, have a designated line management ‘owner’. The controls are designed to provide a costeffective assurance that Implats’ assets are safeguarded and that liabilities and working capital are efficiently managed. Established organisational policies, procedures, standards, guidelines, structures and delegation frameworks provide appropriate levels of direction, accountability and segregation of responsibility, which facilitate self-checking and monitoring mechanisms. Internal audit, in partnership with senior management, monitors these controls and risk management processes (page 139). and perceptual to regulatory and global) Out of this risk process, sustainability issues are identified • Identifying the risk entails establishing both source and per discipline and aggregated into overall Group risk. This cause, and evaluating all possible consequences process is a journey which should be completed in the • Analysing risk – what does this mean for our objectives? coming year for Implats to better understand issues of • Risk evaluation encompasses determining the risk materiality. At present these material issues have been rating (by severity, exposure and frequency) using identified as: standard Implats tables, identifying controls (existing or • Safety – inherent in sustaining our business is to new) and prioritising risks ensure safe business practices that will translate into • Treating risk requires considering all options to establish zero harm to our employees the most appropriate response for every risk identified • Health – understanding the impact of HIV on (avoid, change probability of exposure and/or frequency, productivity and its correlation to the prevalence of TB transfer, retain) • Climate change – its impact on the availability of critical resources such as water and the role we play Ongoing review ensures the risk plan remains relevant. through our operations in green house gas emission Factors that may affect consequences and the likelihood of control and improving efficiencies by managing our an outcome, and the factors that affect the suitability or energy consumption cost of treatment options may change. Implats therefore Annual nancial statements repeats the risk management cycle regularly. All information is captured into a group risk repository system, feeding into the Group risk profile. Risk reports are presented to the appropriate bodies and escalated as required, www.implats.co.za 40 Implats Integrated Annual Report 2010 www.implats.co.za 41 Implats Integrated Annual Report 2010 www.implats.co.za 42 Implats Integrated Annual Report 2010 pp 40 – 42 Implats provides a clear explanation of the Group’s governance structure, and the approach within the organisation to accountability at all levels of the business, from operational to board. The process for managing risk is explained with a clear, straightforward sentence on what happens at each stage of the process along with further detail in the narrative regarding the process of reviewing the risk profile. 44 Integrated thinking in reporting
