PURPOSE OF CHARTER
This Risk Committee Charter sets out the membership, responsibilities, authority and operation of the Risk Committee of AWB Limited (AWB).
AUTHORITY
The Committee is appointed and authorised by the Board of AWB to assist the Board in fulfilling its responsibilities. As such, the Committee exercises the authority and power delegated to it by the Board.
The Committee has the authority to conduct or direct any investigation required to fulfil its responsibilities and has the ability to retain, at AWB’s expense, such legal, accounting or other advisers, consultants or experts as it considers may be necessary from time to time in the performance of its duties.
COMPOSITION
Members of the Committee are appointed by the Board. The Chairman of the Board shall recommend the appointment or reappointment of each member of the Committee. Only non-executive Directors may be members of the Committee.
The Committee is to be composed of at least three members. One of the members shall be the Chairman of the Audit Committee.
A quorum shall be three members.
Having regard to the operational, financial and strategic risk profile of the Group, it is appropriate that members of the Committee have a diverse range of backgrounds, skills and experiences.
CHAIRMAN
The Chairman of the Committee must be a non-executive Director of the Board and shall be eligible for re-appointment annually by the Board. The Chairman of the Committee should not also be the Chairman of the Board.
Should the Chairman be absent for all or part of a meeting, a designated member of the Committee shall deputise for the Chairman.
TERM
Each member shall be appointed for a term of 12 months. The performance of each Committee member shall be reviewed annually by the Chairman of the Committee in conjunction with the Chairman of the Board.
It is expected that no Committee member should serve on the Committee for a period of more than six years.
Periodic rotation of non-executive members’ appointments is to be encouraged. However, no more that one non-executive member should leave the Committee pursuant to rotation in any one year.
MEETINGS
Committee members may attend meetings in person or by electronic means.
The Committee should meet at least four times per year with such other meetings to be called as may be necessary from time to time.
In addition, the Chairman may call a meeting at any time and will call a meeting of the Committee if so requested by any member of the Committee or by the Chairman of the Board.
ATTENDANCE AT MEETINGS
The Chief Executive Officer, Chief Financial Officer and Chief Risk Officer shall attend each meeting of the Committee.
Any other members of management and/or parties external to AWB may be invited to attend any meeting of the Committee or part thereof.
The Company Secretary shall be appointed Secretary of the Committee.
DIRECT ACCESS
Direct access to the Committee shall be provided to executive management via the committee Secretary or Chairman.
Outside of Committee meetings, the Committee will have unfettered access to relevant executives, although the Chairman of the Committee will normally keep the Chief Financial Officer and Chief Risk Officer fully informed of any such dialogue.
DUTIES AND RESPONSIBILITIES
The Committee is responsible for:
- ensuring that the Board considers risk as an integral element of strategy development and that the strategy enunciates the risk parameters that are acceptable to the Board;
- review and oversight of the level and concentration of risks within AWB and its subsidiaries (“the Group”) to ensure consistency with the Board’s risk appetite. This includes reputational risk, credit risk, market risk, operational risk, compliance risk, insurance risk and regulatory risk;
- making recommendations to the Board concerning the Group’s risk appetite, significant changes to any risk policies, and particular risks or risk management practices of concern to the Committee;
- reviewing management’s plans for mitigation of the material risks faced by the various business units of the Group and the limits and delegations within the Group are structured to constrain operational activities to the agreed level of risk;
- oversight of the implementation and review of risk management and internal compliance and control systems throughout the Group;
- promotion of awareness of a risk based culture and the achievement of a balance between risk minimisation and reward for risks accepted; and
- recommending credit limits to the Board for approval.
Other Responsibilities
The other responsibilities of the Committee include:
- Monitor, on a regular basis, AWB’s risk management profile via the Chief Risk Officer’s Report and other relevant reports.
- Meet privately on a regular basis with the Chief Risk Officer.
- In consultation with the Chief Executive Officer recommend to Board the appointment (and thereafter monitor his/her performance) and, if relevant, dismissal of the Chief Risk Officer.
- Obtain from management on at least an annual basis, reasonable assurance that the policies and controls designed to maintain compliance with those laws and regulations applicable to AWB’s various business activities, are being adhered to.
- Review issues raised by Internal Audit, the external auditor or the Audit Committee that impact the risk management framework or the Group’s risk management.
- Examine any other matters referred to it by the Board
- Refer in writing to the Audit Committee any matters that have come to the attention of the Committee that it considers are relevant for the Audit Committee.
REPORTING AND ASSESSMENT
The Committee, through its Chairman, reports to the Board at the earliest possible Board Meeting after each Committee meeting, any matters that should be brought to the attention of the Board, and any recommendations requiring Board approval and/or action. Minutes are to be kept of all Committee meetings and circulated to the Board.
At least annually, a review of the Charter and its continuing adequacy shall be performed together with an evaluation of the Committee’s performance as it relates to the requirements of the Charter.
This Charter dated 26 September 2007 supersedes any terms of reference previously in force.
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