Risk management

Risk management framework 

The objective of the Group’s risk management framework is to manage risk appropriately to support the strategic goals of the Group. It is designed to manage rather than eliminate the risk of failure to achieve business objectives and to provide reasonable,
not absolute assurance.

The Board has overall responsibility for risk management and determines the Group’s risk strategy, assesses and approves risk appetite and monitors risk exposure consistent with strategic priorities. The Board has ultimate responsibility for the effectiveness of internal control systems and is supported by other Committees which monitor risks specific to certain areas:

• The Audit Committee oversees the Group’s risk management framework;
• The Health, Safety and Sustainability Committee reviews health, safety and sustainability risk management across the Group;
• The Remuneration Committee ensures that the remuneration structure does not encourage excessive risk taking by management;
• The Nomination Committee ensures that the composition of the Board and its Committees is appropriate to oversee risk management;
• The Chief Executive Officer and Executive Committee implement the risk strategy determined by the Board.

The General Directors of each operation and functional leadership teams have overall responsibility for the identification and management of risk within their respective areas. The Executive Committee, led by the Chief Executive Officer, monitors the risks related to achieving strategic objectives and oversees operating plans and the implementation and maintenance of controls.

The Board has completed a robust assessment of the Group’s principal risks. The Group Risk function provides guidelines, infrastructure and best practice to support risk identification, risk assessment and risk monitoring across the Group and helps to promote an appropriate risk culture. 

Identification of principal risks and emerging risks

The Group’s Risk function is responsible for the Group risk map, through which principal risks are identified and assessed. Risks from across the Group’s individual risk registers are aggregated, evaluated and prioritised according to the potential severity and likelihood of occurrence. The Board and Audit Committee review the Group’s principal risks and any updates on them and their outlook and they consider the mitigating actions and controls in place in respect of these risk factors.

In addition to principal risks, the Group has a process for the identification and monitoring of emerging risks. These risks are defined as being at an early stage of identification and/or likely to increase significantly in the future. The Group’s Risk function has established an emerging risk framework and risk register, which documents and assesses key emerging risks which have the potential to significantly impact the Group’s strategy. The results of this assessment are reported to the Board on an annual basis for review and challenge. The Board currently considers those emerging risks which are most significant to the Group to include: macroeconomic disruption in the form of potential global protectionism and trade tariffs; environmental and climate change including societal expectations around required standards and responsible investing; global pandemics and any impact on international trade or restrictions on the movement of goods and people; any impact on demand for copper or the Group’s ability to access its key markets due to geopolitical disruption; and long-term political instability in the countries in which the Group operates.