risk management
RISK MANAGEMENT Creating value by driving sustainable growth Protecting value by increasing business resilience
At Vector, we recognise that rigorous risk and opportunity management is essential for corporate stability and performance, and supports Vector in its pursuit to create a new energy future. To drive sustainable growth and ensure business resilience, we must anticipate risks to our operations while capitalising on opportunities as they arise. Vector’s enterprise risk management (ERM) framework provides a flexible and purpose-built approach to the application of risk management across Vector and is consistent with the Australian / New Zealand Risk Management Standard “AS/NZS ISO 31000:2009 Risk management – Principles and Guideline”. Our risk management processes and tools are embedded within our business operations to drive consistent, effective and accountable decision making. In line with the Three Lines of Defence principle, all Vector People are responsible for applying Vector’s ERM framework within their individual roles and are encouraged to proactively identify, analyse, escalate and treat risks. This risk mindset has been implemented through: • Acknowledgement of risk management’s value at Executive and Board level; • Relatable and easily applied risk management policies, processes and tools; • Integration of risk champions throughout the business; and • Continuous training and education, both formal and informal. To further promote accountability and transparency, key business areas formally present their material risks to the Board Risk and Assurance Committee (BRAC) on an annual basis. These material risks are assessed against a group-wide set of criteria covering both consequence and likelihood, as defined in Vector’s Group Risk Assessment Matrix. To support the identification of emerging risks and opportunities, Group Risk monitors the changing business landscape, assessing the influence of macro-economic trends on Vector’s operating environment. These perspectives, along with the material risks from the individual business unit risk profiles, inform the development of the Group Key Risk Profile which provides both the Board and Executive team with a consolidated view of: 1. The strategically-focused risks which could have a significant impact on the long-term value and sustainability of Vector’s business; and 2. The material operational risks facing Vector as part of its business-as-usual activities which require significant oversight and control. Vector’s Group Internal Audit function provides independent and objective assurance on the effectiveness of governance, risk management and internal controls across all business operations. The team follows a co-sourced model, drawing on both in-house and external expertise, and has unrestricted access to all Vector staff, records and third parties (as deemed necessary). The team liaises closely with KPMG, as Vector’s external auditor, to share the outcomes of the internal audit programme to the extent that they are relevant to the financial statements.
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