Risk management
The board is responsible for the total process of risk management. It sets
the risk strategy, which is based on the need to identify, assess, manage
and monitor all known forms of risk across the Group. Risk management
is conducted after consulting with the executive directors and senior
management within the divisions.
Management is accountable to the board for designing, implementing and
monitoring the processes of risk management and integrating it into the
day-to-day activities of the Group. The risk aversion philosophy is communicated
to all managers and employees in an endeavour to incorporate this philosophy
into the language and culture of the Group. Risk management and internal
control are practised throughout the Group and are embedded in day-to-day
activities.
The risk committee attests that there are adequate systems of internal
control in place to mitigate the significant risks faced by the Group to
an acceptable level. The systems are designed to manage, rather than eliminate,
the risk of failure or to maximise opportunities to achieve business objectives.
Risk is not only viewed from a negative perspective. The review process
also identifies areas of opportunity, such as where effective risk management
can be turned to a competitive advantage.
The management of risk and loss control is decentralised, but in compliance
with Group policies on risk financing and self-insurance, utilises the
Group risk-management framework. Compliance measurement is conducted through
the review of periodic risk-activity reports including measurement of identified
losses. The decentralised structure and geographic spread ensures that
the overall Group risk is balanced and minimised.
At operational level, senior management identifies major business risks,
promotes awareness, introduces applicable control environments and procedures
and applies risk-monitoring techniques. The divisional risk committees
identify the manner and extent to which risk is controlled and/or reduced,
while monitoring the process.
Bidvest’s decentralised structure each of the operations being self-sufficient
with regard to disaster recovery and management succession plans. The individual
business units are sufficiently small and independent of each other to
eliminate Group-wide disaster risk.
In addition to the Group’s other the need for a confidential reporting
process (“whistle blowing”) covering fraud and other risks. The whistle-blowing
reporting procedures and 24-hour call centre ensure formal reporting and
feedback. The call centre received 484 calls, resulting in 153 investigations.
These investigations covered human resources issues (73), breach of ethics
or unfair labour practice (23), reported racism (6), general complaints
(12), requests for information (18) and criminal investigations (21). These
investigations have lead to numerous disciplinary actions and some criminal
prosecutions.
The calls relating to the investigations were received and answered in
seSotho (1), isiXhosa (1), seTswana (2), isiZulu (15), Afrikaans (15) and
English (119).
While operating risk can never be fully eliminated, the Group endeavours
to minimise it by ensuring that the appropriate infrastructure, controls,
systems and human resources are in place throughout the businesses. Key
policies employed in managing operating risk involve the segregation of
duties, transaction authorisation, monitoring and financial and managerial
reporting.
The effectiveness of the internal control systems, including the potential
impact of changes in the operating and business environments, is monitored
through regular management reviews (with representation letters on compliance
signed annually by the chief executive and chief financial officer of each
major business unit), testing by internal auditors and testing of certain
aspects of internal financial control systems by the external auditors
during the course of their statutory examinations. Directors make annual
written declarations of interests and are obliged to report any potential
or actual conflicts.
Sustainability
The principles of sustainability within Bidvest are set out in Sustainability
at Bidvest. This year the sustainability report is presented as part
of the annual report. The Global Reporting Initiative guides Bidvest’s
approach to faceted decentralised group, divisions may have different
sustainability issues and reporting meaningfully in totality presents
a challenge, although several key issues are common. An online internet-based
data collection tool has been developed to facilitate the collation,
management and reporting of sustainability issues.
Sustainability at Bidvest is about being Proudly Bidvest and offers employees
a fresh way of thinking that inspires them, and enables a new generation
of entrepreneurs to create business value that integrates evolving financial,
social and environmental needs and expectations.
The risk committee and the board adopted Group environmental and HIV/Aids
policies, which have been in place and operative since 2006. Some divisions
have developed a specific environmental policy relevant to their business.
RELATIONSHIPS WITH SHAREHOLDERS
The Group pursues dialogue with institutional investors based on constructive
engagement and the mutual understanding of objectives, having regard
to statutory, regulatory and other directives regulating the dissemination
of information by companies and their directors. To achieve this dialogue
there have been a number of presentations to, and meetings with, investors
and analysts to communicate the strategy and performance of the Group.
The quality of this information is based on the standards of promptness,
relevance and transparency. The Group makes every effort to ensure that
information is distributed via a broad range of communication channels,
including the internet, having regard for security and integrity while
bearing in mind the need that critical financial information reaches
all shareholders simultaneously.
The board accepts its duty to present a balanced and understandable assessment
of the
Group’s position in reporting to the communities in which it operates and
the greater demands for transparency and accountability regarding non-financial
matters. Reports address material matters of significant interest and concern
to all stakeholders and present a comprehensive and objective assessment
of the Group so that all stakeholders with a legitimate interest in the
can obtain a full, fair and honest account of its performance. |
