The Board recognises that effective risk management processes help ensure the business is more likely to achieve its business objectives and that the Board meets its corporate governance responsibilities. In meeting its responsibilities, the Board has ensured that management has put in place comprehensive risk management policies and practices across the Group. The Board conducts annual reviews of the Group’s risk management framework to ensure that it continues to be sound. During FY18, the Audit and Risk Committee conducted a review of the Group’s risk management framework to ensure it is working effectively and within the risk parameters set by the Board.
Such risk management processes include defining the risk oversight responsibilities of the Board and the responsibilities of management in ensuring risks are both identified and effectively managed. Whilst ultimate responsibility for risk oversight rests with the Board, the Audit and Risk Committee is the delegated mechanism for focusing the Group on risk oversight, risk management and internal controls. The Audit and Risk Committee reports to the Board on risk management and internal control matters in accordance with its main responsibilities as outlined in the Audit and Risk Committee Charter.
For further details of the Audit and Risk Committee composition and responsibilities, refer to the Audit and Risk Committee disclosures under Principle 4 – Safeguard integrity in corporate reporting.
The Audit and Risk Committee is supported in managing risk through the combined activities of the following:
The Group has implemented risk management software across the Group for the purpose of identifying and managing workplace health and safety, business continuity and environmental risks. The software is a critical tool for executives and senior management and has enhanced the identification, reporting and monitoring of actions in this important area.
Risk management is embedded in the Group’s policies and procedures which have enabled the Group to pro-actively identify and manage all types of risk within the organisation. The Board aims to continually evaluate and re-assess the risk management and internal control practices of the Group to ensure current good practice is maintained and to preserve and create long-term value within the organisation.
Certification of Risk Management Controls
In conjunction with the certification of financial reports, the Managing Director and Chief Financial Officer state in writing to the Board each reporting period that in their opinion:
The statements from the Managing Director and Chief Financial Officer are based on a formal sign-off framework established throughout the Group and reviewed by the Audit and Risk Committee as part of the financial reporting process.
Economic, Environmental and Social Sustainability Risks
The Group’s keys risks to its future prospects, and measures to mitigate these risks where possible, are outlined in the Managing Director’s Review of Operations in the 2018 Annual Report and comprise the following:
The Board is committed to sustainable practices throughout its operations and continues to work with key stakeholders and communities. The Board recognises that a sustainable business is one that provides a safe, rewarding and diverse environment for its people whilst operating in an environmentally and socially responsible manner. The Board also accept the increasingly important role the Group’s products and superior water solutions play in enabling customers and consumers to conserve and use water more efficiently.
GWA has a strong pedigree and history in developing innovative solutions in water. Sustainability in the area of water solutions has been its mantra for over 35 years. Caroma was the first brand in the world to introduce dual flush technology in 1984 which has subsequently been further developed to enable enhanced water conservation. During FY19, GWA will introduce a consolidated sustainability report to provide shareholders and other stakeholders with detailed information on its on-going approach to sustainability.
The Board is committed to reducing energy, carbon emissions, water and waste across the GWA Group operations. GWA is a low emissions intensity entity but it continues to voluntarily report its carbon emissions on the GWA website www.gwagroup.com.au under Carbon Reporting. For FY18 total carbon emissions from GWA’s controlled facilities were approximately 5,800 tonnes of carbon dioxide equivalent (CO2e), representing a 15 per cent reduction on the prior year. This reduction is due to a combination of factors including site closures and the implementation of energy efficiency measures across the Group including the recycling of water and installation of solar panels.
The Board is committed to continuous improvement in workplace health and safety performance through comprehensive safety systems and processes, communication with employees and increased diligence in identifying and removing safety risks. The Group aims to provide a safe and healthy workplace with the objective of an injury free work environment. For further information on workplace health and safety, please refer to the Group’s website at www.gwagroup.com.au under Health and Safety.
The Board is committed to providing stakeholders with a comprehensive understanding of the Group’s tax activities, and in FY17 signed up to the Board of Taxation’s Voluntary Tax Transparency Code (‘Code’). The Code is designed to encourage greater transparency within the corporate sector and enhance the community’s understanding of the corporate sector’s compliance with Australian tax laws. The Group follows the recommendations outlined in the Code in preparing the Group’s Tax Transparency Report.
Refer to the Group’s website at www.gwagroup.com.au under Corporate Governance for a copy of the Board Tax Policy and Tax Transparency Reporting.