Sasol Integrated Report 2023 - Book - Page 33
INTRODUCTION
ABOUT SASOL
STRATEGIC OVERVIEW
CREATING VALUE
PERFORMANCE
GOVERNANCE AND REWARDS
ADMINISTRATION
OUR RISK MANAGEMENT CONTINUED
Governance and oversight
Managing our Group risk appetite
and tolerance
To ensure decisions align with our strategy and execution, we adhere to an integrated governance and
oversight process in managing our uncertainties. This facilitates the coordination and management of
risks throughout our organisation, with dedicated oversight provided by the Board of Directors (Board),
Board Committees, and Group Executive Committee, all operating within their defined terms of reference.
We have a comprehensive understanding of the risks
inherent to our organisation and we take proactive
and effective measures to manage them in alignment
with our risk appetite. Our aim is to optimise returns
and outcomes.
Top-down
Extent and type of risk we are willing to take in order to meet
our strategic and capital deployment objectives.
Is accountable for the risk management
approach and governance.
Assist the Board in giving effect to its
accountability.
Sets the risk appetite and risk tolerance limits
to sustain and grow the business and plays a
pivotal role in ensuring appropriate responses
to the Group top risks (GTRs).
In line with their term of reference, assist
the Board in governing the GTRs assigned
to them and ensure that responses
and Combined Assurance Model (CAM)
are appropriate.
Continually assess the effectiveness of
the risk management process, completeness,
and governance of the GTRs.
GROUP EXECUTIVE COMMITTEE (GEC)
The Board delegates responsibility to implement
and execute risk management to the Chief
Executive Officer (CEO) who in turn delegates
to the GEC.
The Executive Vice Presidents (EVPs),
as members of the GEC, are accountable
for management of risks in their respective
areas of responsibility.
EVPs are designated as Risk Sponsors
for allocated GTRs and ensure that the GEC
has proper line of sight over governance.
EVPs continually assess the completeness
of the top risks in their respective areas
of responsibility, ensure these are aligned
with the GTRs and test the adequacy of
responses and the CAM.
BUSINESSES/GROUP FUNCTIONS
In line with our operating model, governance
and oversight of risk management responsibility
has been delegated to the Businesses and
Corporate Centre Functions including the
operationalising of risk management in line
with established business protocols.
The Businesses and Corporate Centre
Functions report their current top and
emerging risks to respective governance
structures and EVPs, using the Plan, Do,
Review and Improve (PDRI) risk management
process, established business protocols
and the CAM.
Ongoing monitoring and reporting of the Board and GEC key performance
indicators, Group top risks, risk responses and action plans
BOARD COMMITTEES
BOARD OF DIRECTORS (BOARD)
Ongoing assurance and reporting on the effectives of risk management
RISK APPETITE
RISK TOLERANCE
Level of uncertainty we are prepared to accept. Identifies the
maximum boundary, beyond which we are unwilling to operate.
In alignment with the Group’s approved risk appetite
and tolerance levels, we actively manage exposures
associated with debt covenants and gearing to strengthen
our balance sheet.
PROCESS IN MANAGING GROUP
RISK APPETITE AND TOLERANCE
• Define risk appetite and tolerance
• Embed principles for managing risk
appetite and tolerance
• Monitor application of risk appetite and tolerance
• Review risk appetite and tolerance metrics
OUR RISK APPETITE AND TOLERANCE METRICS:
Net debt to EBITDA
Gearing
Net debt
REVIEW OF RISK METRICS CONSIDERS CHANGES IN:
Internal operating environment
External environment (eg economic and
geopolitical environment)
Environmental, social and governance (ESG)
requirements
Strategic objectives, material matters and Group
top priorities
Bottom-up
Credible risk scenarios
Competitive conditions
SASOL INTEGRATED REPORT 2023
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