The board reviews the companys risk management systems and control frameworks, and the effectiveness of their implementation,
Question:
The board reviews the company’s risk management systems and control frameworks, and the effectiveness of their implementation, annually. The board also considers the management of risk at its regular meetings. The company’s risk profile is reviewed annually upon advice from management including, where appropriate, as a result of regular interaction with management and relevant staff from across the company’s business.
The board or the company’s senior management may consult with the company’s external accountants on external risk matters as required. The company’s risk management systems and control frameworks for identifying, assessing, monitoring and managing its material risks, as established by the board in conjunction with management, include:
- The board’s ongoing monitoring of management and operational performance
- A comprehensive system of budgeting, forecasting and reporting to the board;
- Approval procedures for significant capital expenditure above threshold levels;
- Regular board review of all areas of significant financial risk and all significant transactions not part of the company’s normal business activities;
- Regular presentations to the board by management on the management of risk;
- Comprehensive written policies in relation to specific business activities;
- Comprehensive written policies in relation to corporate governance issues;
- Regular communication between directors on compliance and risk matters; and
- Consultation and review processes between the board and external accountants.
The board requires that each major proposal submitted to the board for decision is accompanied by a comprehensive risk assessment and, where required, management’s proposed mitigation strategies. The company has in place an insurance program that is reviewed periodically by the board. The board receives regular reports on budgeting and financial performance. A system of delegated authority levels has been approved by the board to ensure business transactions are properly authorized and executed
Read the case and deliver the following
- Develop a risk register for the above organization.