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Ramsay Health Care Limited Annual Report 2016

The Board has ultimate responsibility for the oversight of enterprise risk management and satisfying itself that the risk management framework is sufficiently robust and sound. The Board has allocated responsibility for managing the Company’s risks as follows: (a) The Board is responsible for managing strategic and political risks (including those associated with merger and acquisition activity. (b) The Audit Committee is responsible for managing direct financial risks to the Company and for matters relating to tax and accounting. (c) The Global RMC is responsible for managing all other enterprise risks, with particular focus on clinical, workplace health and safety and environmental risks. Strategic & Operational Risks Strategic and operational risks are considered at least annually by all operating divisions as part of the annual strategic planning, forecasting and budgeting process. Each facility is responsible for the development and maintenance of a risk management plan identifying material risks, developing strategies for dealing with those risks and developing and testing controls. During FY2016, the Global RMC and the Board invested considerable time evaluating the Company’s Strategic and Operational Risk Profile. Material strategic and operational risks were identified and assessed and the effectiveness of relevant risk mitigation strategies were scrutinised. The Global RMC was satisfied that appropriate controls were in place to address these risks. The Strategic and Operational Risk Profile has been distributed throughout each of the Company’s business units and will be reviewed periodically. The Company’s risk management framework The Company has in place a Risk Management Framework which is consistent the definition of an ‘appropriate framework’ in Standard AS/NZS ISO 31000:2009 Principles and Guidelines for Risk Management. The Risk Management Framework: • provides a Group-wide approach which outlines the structure and policies applicable to the proactive identification, assessment, management, reporting and oversight of risks, particularly material business risks; • encompasses all areas of risk with the capacity to adversely affect the business of the Group, such as strategic, financial, patient safety, workplace health and safety, the operating environment and legal risks; • emphasises a collaborative approach by all stakeholders to the identification of risks, the importance of clear communication of initiatives and strategies to manage identified risk and reinforcement of compliance with such initiatives as an integral part of corporate culture; and • provides guidance on risk treatment and prioritisation. Our material business risks, including economic risks, together with our approach to managing those risks, are outlined in the Operating and Financial Review section of our 2016 Annual Report. The Company does not consider that it has any material environmental or social sustainability risks (as those terms are defined in the ASX Recommendations). Global Risk Management Committee The Global RMC helps drive a positive culture towards risk management that promotes open disclosure and quality improvement in risk management activities in these key areas. The Global RMC Charter was reviewed and updated during FY2016. The Charter provides that the objectives of the Committee is to oversee and drive improvement in risk management practices in: • patient safety; • workplace health and safety; and • the Company’s operating environment (e.g. IT/cybersecurity, building and facilities and regulatory compliance). There are currently eleven (11) members on the Global RMC comprising a mix of Non-Executive Directors (four), executive Directors (two), senior executives/management personnel (four) and the Strategic Medical Advisor, Professor John Horvarth. Given the nature of the risks inherent in owning hospitals on an international scale, the Board has decided that it is in the Company’s best interests for the Global RMC to include a strong senior executive/ management presence to ensure that the Committee has the necessary technical and industry knowledge available to it at all times. Despite the Global RMC not being comprised of a majority of independent Directors, the Board considers that the Global RMC operates efficiently and effectively in bringing transparent, focused and professional judgement in overseeing the Company’s risk management framework. The current membership, independence of, and details of Global RMC meetings and attendance by each Director Global RMC member are set out earlier in this Corporate Governance Statement. Further, the relevant experience and qualifications of the Director members is set out in the Board of Directors section of this Annual Report. ANNUAL REPORT 2016 27


Ramsay Health Care Limited Annual Report 2016
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