ESB Annual Report 2012 - (Page 58)
58 ESB Annual Report 2012 - Energy for connecting you
RISK MANAGEMENT REPORT
RISK MANAGEMENT POLICY
THE BOARD OF ESB HAS OVERALL RESPONSIBILITY
FORTHE GROUP’S RISKS. IN THIS REGARD, THE BOARD
HAS ESTABLISHED AN OVERALL RISK MANAGEMENT
FRAMEWORK THAT PROVIDES CONTINUOUS
IDENTIFICATION, EVALUATION AND MANAGEMENT OF
ESB’S SIGNIFICANT RISKS.
ESB’S RISK FRAMEWORK
The approach that the Board has adopted to fulfilling its risk oversight duties is based on the overall
risk management framework outlined in the Board members’ Report on page 54. This section
describes in more detail the operation of the overall risk framework on which the Board relies,
highlighting the main components of the framework. This section also provides a summary of
Group’s key risks and the main mitigation strategies deployed by Executive management.
ESB’s risk management framework meets the requirements for risk management that are
specified in Section 8.1 and 8.2 of the Code of Practice for the Governance of State Bodies as
updated in 2009. The framework also complies with International Risk management standard ISO
31000.
The risk framework is based on an Enterprise Risk Management (ERM) model, which ESB adopted
in 2005. ERM provides an integrated approach to risk and has become established practice in ESB
for managing uncertainty and minimising threats.
ESB’s risk management has been designed to achieve maximum integration of risk management
into normal business processes. It provides for risk identification and assessment, with escalation
as appropriate.
Recognising that risk is an active element of the
environment within which ESB operates, the
Company is committed to successfully managing the
Group’s exposure to risk and to minimising its impact
on the achievement of business objectives.
It is ESB’s policy that risk management should be
integrated into normal management processes
such as business planning, investment analysis,
project management, operational management, and
management reporting.
ESB therefore requires its management at all levels
in carrying out their duties to:
Identify and review all significant risks to which
their business area may be exposed
Avoid unreasonable or unnecessary exposures
to risk
Respond appropriately to risks, based on risk
assessments, by applying relevant controls and
mitigants
Monitor and report on the current status of risks,
including progress against planned mitigation
actions
RISK MANAGEMENT FRAMEWORK
RISK OBJECTIVES
The objectives of our risk management framework include
Manage risk to a level acceptable to the Board.
Maximise the achievement of our strategy by managing our risks and opportunities across the
Group.
Ensure that the fundamentals of good risk management are incorporated into decision making at
all levels.
Maintain a high level of awareness and control at all levels of the organisation in respect of the
risks associated with delivering ESB’s business objectives.
In support of the above policy, the Board has
established an overall risk management framework
that provides continuous identification, evaluation
and management of ESB’s significant risks. This
risk management framework consists of appropriate
structures to support risk management, formal
assignment of risk responsibilities, procedures and
systems for risk identification/assessment/reporting,
plus ongoing monitoring of the effectiveness of risk
mitigation actions and controls.
The risk management framework has become firmly
established throughout the Group in recent years.
The key components of the framework comprise of
the following:
Processes for identifying and prioritising the
Group’s risks for Management and Board
attention;
Table of Contents for the Digital Edition of ESB Annual Report 2012
ESB Annual Report 2012
Contents
Business Overview
Chairman’s Statement
Chief Executive Review
Our Strategy and Business Model
Operating and Financial Review
Operating Environment
Finance Review
Business Unit Sections: ESB Generation and Wholesale Markets
ESB Networks
NIE
Electric Ireland
Corporate Social Responsibility
Introduction from Executive Director, People and Sustainability
Sustainability Charter
Energy Usage 2012
ESB Innovation
Equality and Diversity
Our People
Our Community
Corporate Governance
Chairman’s Corporate Governance Statement
The Board
Executive Team
Board Members’ Report
Risk Management Report
Statement of Board Members’ Responsibilities
Independant auditor’s report to the stockholders of Electricity Supply Board (ESB)
Statement of Accounting Policies
Financial statements
Prompt Payments Act
ESB Annual Report 2012
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