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.
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