Risk management

How we manage risk

Effective risk management is imperative, both to drive the success of ABG’s strategy and vision and to protect our values. We must maintain the ability to take calculated risks in a manner that does not jeopardise the direct interests of ABG’s stakeholders.

For this reason, we have adopted a comprehensive risk management framework to address risk tolerance and control. It is based on international standards, applicable governance requirements and the ethics that underpin our Code of Conduct.

Our risk management framework

Our risk management framework includes:

  • the key requirements of ISO 31000:2009
  • UK corporate governance standards
  • other generally accepted governance principles.

We believe this framework serves us well. In addition to our Code of Conduct, it includes the ABG risk management charter, risk management policy and a number of detailed risk management procedures.

Everyone is required to comply with the framework, whether they are members of the ABG Group, material operations, service organisations, support functions, processes or projects.

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Roles and Responsibilities

There is a clear line of responsibility for risk management which runs across the key functions and tiers of our corporate governance structure.

Oversight and review

The Board is responsible for defining our risk appetite and for risk management compliance. The Board or its committees:

  • approves our risk management strategy
  • monitors compliance
  • reviews significant business risks and internal controls, ensuring action where it’s needed
  • conducts annual strategic risk workshops
  • ensures that the Head of Risk and Internal Audit function has the cooperation it requires.

Committee participation and review

Two Board committees play an active role in the risk management review process:

  • our Audit Committee reviews our internal control and financial reporting risk management systems. It approves the annual internal and external audit plan and reviews all material findings.
  • our EHS&S Committee reviews our environmental management and health and safety systems. It also reviews management reports on our CSR programme.

Each of these committees reports to and makes recommendations to the Board.

Implementation and application

ABG’s management has the task of:

  • designing and implementing our risk management processes
  • embedding compliance into the group’s culture
  • communicating risk management issues to our employees
  • making sure everyone involved in managing risk has full access to Group data.

Internal audit

Our Head of Risk and Internal Audit function plays a critical role in advising and guiding the Board and management. Its responsibilities include:

  • crafting a strategy for the implementation of our risk management system
  • reviewing and monitoring our overall risk profile
  • gauging the sufficiency of risk treatment plans to address significant risks
  • considering significant internal, forensic and external audit findings
  • providing training and support.

Policies

In addition to the policies and procedures that guide our risk management framework, we have adopted policies for environmental, health and safety and supply chain management.

Procedures

We have adopted procedures designed to ensure that risks are managed at all appropriate levels of the business, using processes based on identification, analysis, evaluation, mitigation, reporting and monitoring.