The entire Board is responsible for overseeing the risk management function. The Company believes that it is crucial for all Board members to be a part of the process and as such has established risk management as a component of the Audit and Risk Management Committee.
The Board is responsible for ensuring risks and opportunities are identified on a timely basis.
The Board has a number of mechanisms in place to ensure management manages risk in an effective manner. These include the following:
- Implementation of Board approved operating plans and budgets;
- Board monitoring of progress against these budgets, including the monitoring of key performance indicators of both a financial and non financial nature; and
- The establishment of risk management identification and mitigation practices.
The Board maintains a combined Audit and Risk Committee. The members of the Committee are detailed on page 10 of the annual report.
The Charter of the Committee is available at the Company’s website
(https://austcohealthcare.com/corporate-governance/audit-and-risk-committee-charter/) or upon request from the Company. The charter includes the committee’s responsibilities which include procedures for general risk oversight and monitoring, internal control and risk management, risk transfer and insurance and other responsibilities.
The Risk Committee reviews the Company’s risk management framework at least annually to ensure that it is still suitable to the Company’s operations and objectives and that the Company is operating within the risk parameters set by the Board. As a consequence of the last review undertaken for the year ended 30 June 2018, there were no significant recommendations made.
Internal Risk Management System Compliance
Management is accountable to the Chief Executive Officer to ensure that operating efficiency, effectiveness of risk management procedures, internal compliance control systems and controls and policies are all being monitored. Management has designed and implemented a risk management and internal control system to manage the Company’s material business risks and reports to the Board on the effective management of those risks. The Company has considered a series of operational risks which the Company believes to be inherent in the industry in which the Company operates. These include:
Changes to operating, market or regulatory environments;
- Fluctuations in demand volumes;
- Fluctuations in exchange rates;
- Increasing costs of operations; and
- Changes in competitive environment.
These risk areas are provided here to assist investors better understand the nature of the significant risks faced by the Company.
The Board requires the Chief Executive Officer and Chief Financial Officer every half year to provide a statement confirming that a sound system of risk management and internal control is in place and that the system is operating effectively in all material respects in relation to financial risks. The Board has received that assurance as part of the approval of this annual report.