SENWES Integrated Report 2020 | Page 166

MANAGING RISK IN THE AGRICULTURAL SECTOR

MANAGING RISK IN THE AGRICULTURAL SECTOR

BLACK SWAN EVENTS , WAITING FOR RAIN AND RESPONDING TO THE UNBELIEVABLE

Environmental risks continue to dominate the latest World Economic Forum ’ s ( WEF ) global risk report of 2020 . Respondents to their Global Risks Perception Survey ranked climate change and related environmental issues as the top five risks in terms of likelihood — the first time in the survey ’ s history that one category has occupied all five of the top spots .

In Senwes ’ case , it is no different . The last time the agricultural sector saw somewhat of a normal or average season was arguably in 2012 . During the period thereafter there were two record crop years , two record drought years and two very sporadic years ranging from record pre-season droughts to record post-season rainfall . The current summer crop production year is no different and experienced extremely late seasonal rainfall followed by above average rainfall . This could result in one of the biggest crops come the end of the delivery season .
Senwes chooses to actively manage its risks by following an Enterprise-wide Risk Management ( ERM ) framework , which provides a framework for our management to effectively deal with uncertainty and associated risk and opportunity , thereby enhancing our capacity to create value .
No entity operates in a risk-free environment and ERM does not create such an environment . ERM rather enables management to operate more effectively in environments filled with risks . It cannot and does not operate in isolation within Senwes , but rather as an enabler of the management process .
OUR ERM-FRAMEWORK IS BASED UPON FOUR CRITICAL RISK ACTIVITIES

� � � �

ENSURING RISK GOVERNANCE
ENHANCING THE RISK CULTURE
RISK STRATEGY
MANAGING THE RISK PROCESS
ERM is inter-related with
Risk management is deep-
Management considers the
The group has a formal risk
corporate governance by
ly rooted in the culture of
entity ’ s risk appetite first in
assessment process in place
providing information to the
Senwes and its strategic and
evaluating strategic alterna-
through which risks and miti-
board on the most significant
tactical intent . The responsi-
tives , then in setting objectives
gating management actions
risks and how they are being
bility and accountability for
which are aligned with the
are identified , assessed , moni-
managed through the Risk
risk management reside at all
selected strategy . Thereafter ,
tored and reported on .
Committee . It is therefore crucial that we utilise and optimise our risk resources which include our employees , risk management technology and liaison network .
levels of the organisation , from its board down to each business manager and employee .
Being risk aware requires that management considers information about internal and
mechanisms are developed to manage the related risks .
Risk appetite therefore guides resource allocation and assists us in aligning the organisation , people and processes in
Our core strategic focus area as part of the risk management process remains the ability to respond to risks by ensuring multiple response plans per risk category .
external environments , deploys
designing the infrastructure
precious resources and recali-
required to effectively respond
brates enterprise activities to
to and monitor risks .
changing circumstances .
82 ROOTED IN AGRICULTURE