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AFRICAN DAWN Annual Report 2016

Corporate Governance continued 6. Risk Management The Board is ultimately responsible for the management of risk. Due to the importance and need for good governance it is assisted by the audit committee. The management of risk has included a proactive approach through an implemented system of effective internal controls maintained and constantly improved by competent ethical managers. The management of risk relies on well-established governance processes and relies on both individual responsibility and collective oversight, supported by comprehensive reporting. The risk approach is one of strong corporate oversight, with the executives having proactive participation in managing the risks and are responsible for identifying and contributing to mitigating strategies to manage risk to an acceptable level. Risk management is seen as the responsibility of each and every employee. The significant risks are formally communicated to the Board (via the audit committee), in minutes of meetings which monitors that risks taken are within acceptable tolerance and appetite levels. The risk appetite is the maximum residual risk that Afdawn is willing to take, the parameters being set by business strategies, business models, review and approving budgets, forecasts and monthly management packs. Risks pertaining to the Group as a whole, but especially focused on liquidity, asset management, credit risk, market risk and human resources, are noted and managed on an in-house risk register presented at monthly Exco meetings. The identified risks, their likelihood of occurrence, severity if occurred, mitigating control and the risk management outcome are discussed on a monthly basis. Risks are ranked and prioritised to ensure swift response and intervention to risks outside the Board’s tolerance levels. Liquidity risks are managed on a short term, and long term basis ensuring pairing of known cash in and outflows, with predictions of expected cash flows. Credit risk is formally managed by the credit committee, who is tasked with managing advances in such a way to ensure repayment of capital plus earnings, and to assess the outstanding value with expected repayment and manage collections of outstanding debts. 7. Social and Ethics Committee The Afdawn Social and Ethics Committee (the committee) was established in 2013. The committee assists the board in monitoring that the group maintains high levels of good corporate citizenship with all stakeholders and ensures that the business considers its social and environmental impact and performance. The committee acts in terms of the delegated authority of the board and assists the directors in monitoring the group’s activities relating to ethics, stakeholder engagement, including employees, customers, corporate social investment, environmental issues, and black economic empowerment. The responsibilities of the committee are as follows: • Monitor the group’s activities relating to social and economic development, good corporate citizenship, the environment, and health and public safety; • Draw matters relating to these activities to the attention of the board, as appropriate; • Monitor functions required in terms of the Companies Act of South Africa and its regulations; and • Report annually to shareholders on matters within the committee’s mandate. Committee members The committee comprised the following members at the end of the reporting period: Director Designation SM Roper (Chairperson) Independent Non-executive JK van Zyl Executive* A Böhmert Executive* * Resigned 11 January 2016 Due to the issues being addressed by the board at present, this committee was informal for the year under review and a more formal process will be introduced in 2017. The Board is in the process of filling the vacancies in this Committee with suitable qualified individuals. AFRICAN DAWN ANNUAL REPORT 2016 17


AFRICAN DAWN Annual Report 2016
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