How do we manage risks and insurance?
Risk overview and impacts
We have a corporation-wide risk management framework, which covers all financial and non-financial risks. We integrate this framework with our planning and business case processes. It focuses on risks that determine whether we will achieve our strategic, corporate and operational goals.
Each division applies the corporation-wide risk management framework when assessing risk at strategic, divisional and operational levels.
We identify ‘strategic risks’ as part of the corporate planning process. These can influence whether or not we achieve our corporate goals. Strategic risks are higher order risks. They tend to be long-term and affect the future direction of Sydney Water.
We identify ‘divisional risks’ as part of the divisional planning process. These can influence whether or not we achieve divisional goals. Divisional risks are lower order risks. They tend to be short-term and focus on the business and operating environment.
‘Operational risks’ include safety and environmental risks, and usually relate to sites, assets and processes that are identified in:
day-to-day business operations
capital investment planning
the management of projects and contracts.
The top five key strategic risks that can affect the financial performance of Sydney Water are set out in the table below. The table also shows ‘mitigation strategies’ to manage the risk.
Table 45 – Strategic risks and mitigation strategies 2011–12