AWB Limited (AWB) has in place a comprehensive risk management framework that is built around the following core principles:
- Commitment – We will meet or exceed the increasing standards for risk management in our chosen markets by continuing to allocate substantial time and resources to identify, assess, manage and monitor risks across the company.
- Understanding – Risk awareness is an integral part of day-to-day management of AWB. Our standard methodology and coordinated approach to the analysis of risk and return will support the aim to optimise commercial decisions.
- Control – Business will be undertaken in a safe and controlled environment, compliant with any limits, procedures or other constraints that are imposed on these activities.
AWB has implemented a systematic management approach consistent with ANZ Standard 4360 for Risk Management. Our enterprise wide system enables the Board and Senior Management to determine and articulate the acceptable level of risk. The Risk Management Policy ensures alignment between the stated appetite for risk and the strategies to achieve strategic and operational objectives.
The Managing Director and the Management Team are responsible for managing risk. Independence is assured by the Chief Risk Officer (as head of the Corporate Risk Unit) who is accountable to the Board and Board Committees for risk oversight and controls.
View the Risk Governance Structure (PDF 21Kb) which reflects the three lines of defence.
The Risk Management Policy forms part of the overall governance framework of AWB, which also includes:
- Code of Conduct;
- Board Reserved Powers and the Management Authorisations Policy;
- Policies for financial control, financial management, tax and accounting;
- Environment, Safety & Health policies;
- HR policies; and
- Compliance policies.
Annual financial budgets are compiled and submitted by management to the Board for approval. Monthly reports are provided to the Board for oversight of financial and non-financial risk exposures and performance.
Issues that are identified for further attention by the Board are managed through the corporate action list controlled by the Company Secretary. This is used to register and manage requests of Management raised by the Board.
Each year the Managing Director and the CFO provide written statements to the Board in accordance with ASX Principles of Good Corporate Governance (Recommendation 7.2). In addition, each member of the Management Team is required to attest that a sound system of risk management, compliance and control exist within the business units or functions under his or her control.
The Internal Audit plan is designed to be risk focused and is endorsed by the Board Audit Committee. It takes into consideration the company business initiatives and the associated risks and their control status. The Internal Audit function is outsourced to a professional firm, and is independent of the external audit function.
Risk Management Policy
AWB is exposed to a complex mixture of risks which at the highest level is described in the six (6) Principal Risk Categories of Market Risk, Credit Risk, Operational Risk, Strategic & Reputation Risk, Compliance Risk and Liquidity & Funding Risk.
AWB has adopted a comprehensive Risk Management Policy which consists of the following documents:
- AWB Group Risk Management Policy;
- Market Risk Policy Part 1 (Framework & Responsibilities), Part 2 (Markets, Products & Instruments), and Part 3 (Limits & Controls);
- Credit Risk Policy Part 1 (Framework & Responsibilities), Part 2 (Customer Credit) and Part 3 (Counterparty Credit for Commodities and Treasury); and
- Enterprise Risk Policy.
The Board approved Risk Management Policy includes the following:
- Approach to Risk Management;
- Governance structure with clearly defined responsibilities;
- Policy requirements for compliance, remuneration, review and approvals;
- Specific limits and authorities in relation to management and control of Market Risk and Credit Risk;
- Specific requirements for segregation of duties and process controls;
- The process to follow in the event of policy breaches; and
- Detailed reporting requirements to the Board, Board Risk Committee, Management Risk Committee and the Managers responsible for day-to-day management of risk.
The Risk Management Policy is supported by a comprehensive infrastructure with:
- Online Risk Registers;
- Robust systems, processes and documentation;
- Risk mitigation policies in relation to Fraud Control and Insurance; and
- Business Unit operating policies and procedures for credit risk management.
Last reviewed on 22 November.
With free Acrobat Reader® software, you can view, download and print PDF files.
Top of Page