Risk Governance Structure and Framework
RISK GOVERNANCE STRUCTURE AND FRAMEWORK
BlueLife faces the risks and uncertainties inherent to the property development sector as well as those associated with the economic situation and the financial world.
The successful management of risk is critical for the Group to deliver its strategic priorities. Whilst the ultimate responsibility for risk management rests with the board, the effective day to day management of risk is integral in the way we do business and the culture of our team. We consider that risk management and mitigation is of collective responsibility within our organisation and we promote the risk awareness culture within the team.
Our risk culture and our management of risks
The conduct of our businesses and activities inherently exposes our organisation to risks. This is why it is essential that the whole organisation is made aware of the risks involved, and of the need to install a proper Risk Management System to identify, monitor, and control risk. We:
- Ensure that the Management Team in all divisions develop a risk awareness culture and that all procedures are in place to identify, assess, report and monitor the major risks in our day-to-day operations.
- Structure the reporting and decision-making processes, adopting collegial decision making with respect to some critical areas.
- Promote increased exchange of relevant information between the various clusters in the Group, particularly with formalised structured meetings where risks can be anticipated at early stages and mitigating actions taken
Setting up and monitoring our risk appetite
- We are focusing more and more only on Azuri development in the short to medium term;
- We operate only in Mauritius although a major part of our on-going development projects is focussing on attracting foreigners to acquire a property in Azuri;
- We manage our operational risk, in particular with respect to our property development, in tune with market conditions;
- We are always looking to restore low financial risk through conservative financial leverage.
How the Board monitors the Group’s principal risks
The Group’s principal risks and the processes through which we aim to manage these risks are outlined in the following pages. We favour regular overseeing by the relevant Committees and the board. On-going monitoring of our principal risks and controls by the Board is undertaken by:
- The CEO reporting on the market conditions dashboards, operational parameters and people as appropriate at each of the scheduled Board or Board Committee Meetings;
- The CEO, as Executive Director, communicate with the Board on any significant market and operational matters between Board meetings;
- The CFO reporting on the Group’s results, forecasts, cash-flows and gearing ratios;
- The CEO and CFO attending the Audit and Risk Committee to present a comprehensive review of the risk framework and risk management plan once a year and at every meeting a follow up on risks highlighted and actions enforced;
- Senior executives attending, on request, the Audit and Risk Committee and/or the Strategic as appropriate to discuss specific risks either across the business such as project development risks, construction and health & safety risks etc.;
- Internal auditors attending the Audit and Risk Committee meeting, as appropriate, for comprehensive presentation of the conducted reviews and discuss the earmarked issues as well as agreeing on planning and receiving comfort that the management has taken on board recommendations.
Risk management framework
Risk is managed at various levels in our organisation and our risk framework is being set on the 3 lines of defence approach moving up to the Board of Directors acting as overseeing body. The Board establishes a governance structure as defined in the table below, identifying any desirable changes to the risk culture into the organisation and ensuring that management takes all steps required to address those changes. The framework is illustrated below: