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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