Risk and opportunity management

In line with our Risk Philosophy Statement, we remain cognisant of the assumption that risk is inherent in businesses. Specifically for us at Barloworld, we embrace that risk represents both threats and opportunities which may have an impact on us achieving our objectives.

These objectives may relate to a variety of the organisation's activities, from strategic initiatives to its operations, processes and projects, and be reflected in terms of societal, environmental, safety and security outcomes. This may furthermore be reflected by way of commercial, financial and economic measures, as well as social, cultural, geopolitical, technological and reputation impacts.

It is for that reason that we believe that all the activities of our organisation involve risks that ought to be managed. Our Risk Management Framework aids decision-making by taking account of uncertainty and the possibility of future events or circumstances (intended or unintended) and their effects on agreed objectives. This is done by applying a robust risk management process, supported by a risk management plan and policy that involves applying logical and systematic methods for:

  • communicating and consulting throughout this process
  • establishing the organisation's context for identifying, analysing, evaluating, treating and monitoring risk associated with any activity, product, function or process
  • reporting the results appropriately
  • ensuring applicability enterprise wide

We don't intend to eliminate risk, rather we want to identify and manage the risks involved in Barloworld's activities to maximise opportunities and minimise adversity. As such, for our Risk Management to be effective, we require:

  • a strategic focus
  • forward thinking and active approaches to risk management
  • a balance between the cost of managing risk and the anticipated benefits
  • contingency planning in the event that critical threats are realised

We thus rely on risk management to also provide a system for setting of priorities when there are competing demands on limited resources.

Our risk management, in line with King IVTM and, where appropriate, international codes of best practice, is aimed at enhancing value for Barloworld's stakeholders and ensuring the efficient application of our six capitals.

At Barloworld we:

  • use appropriate procedures in risk management to support and enhance our strategic objectives
  • ensure that risk management is an integral part of the organisation's decision-making processes
  • use a structured risk management programme to minimise reasonably foreseeable disruption to operations, harm to people and damage to the environment and property
  • set limits regarding the company's risk appetite
  • identify and take advantage of opportunities as well as minimising adverse effects
  • train our people to implement risk management effectively
  • strive to continually improve our risk management practices

The Risk and Sustainability committee, established and empowered by the board, operates with Terms of Reference established by the board. This committee assists the board in reviewing the Risk Management Framework and the significant risks facing the company.

Below is our risk profile (heatmap) as at 30 September 2020. It provides an overview of the assessment of our top 13 Key Risks, with the strategic risk considered from a residual risk perspective and their movement year-on-year (risk has increased ↑ or risk has decreased ↓ ):