Risk Management

RISK MANAGEMENT OVERVIEW

Risk Management is a business imperative that enables the Capespan Group to manage its diverse risk profiles in the Fruit, Logistics and Farming divisions.

Risk management aims to maximise the total economic value of our Group but, more importantly, it seeks to entrench future sustainability through responsible business practices in a dynamic and volatile business landscape.

In 2002, Capespan implemented an Enterprise-wide Risk Management Programme (ERM) that has delivered improved financial and organisational management because of calculated risk taking, informed risk decision-making, as well as appropriate and cost–effective risk interventions.

At Capespan, our risk process is integral and relevant to our business and has evolved to be interactive, systematic, transparent and improved continuously. Through the process, we aim to:

  • give the board assurance and allow informed risk-based decision-making
  • allow management to pursue strategic growth opportunities with speed and resilience
  • generate greater confidence in achieving the strategic objectives
  • affirm the ultimate outcome of Risk Management - to protect and grow shareholder value

RISK MANAGEMENT ACCOUNTABILITY

The Board, through the Audit Risk Committee and the Group Executive Committee, is responsible for the Risk Management process and its effectiveness. Notwithstanding the Board’s responsibility, management is accountable to the Board for designing, monitoring and implementing an Enterprise-wide risk policy and process.

RISK MANAGEMENT POLICY & PROCESS

Capespan has adopted the International (ISO) 31000 Standard as evaluation criteria and we have aligned our risk management framework to the best practices recommended in King III.

The process is customised to meet Capespan’s diverse business sectors and strategic business drivers, enabling us to identify, evaluate, manage, and measure risks throughout the world. Risk, and the possibility of a threat or an opportunity occurring within the Group, is managed by applying a robust and mature risk programme, which has an effective risk management process.

Risk management facilitates and an enterprise-wide risk process identifies, assesses and prioritises the strategic business risks in the respective Capespan entities. The evolution of the universal model has taken significant time to propagate and it's entrenched with the sponsorship of the Board and the executive management in the various group entities.

The value of Risk Management becomes evident where strategic interventions are designed to exploit, enhance and proactively respond with an offensive risk strategy that creates sustainable growth.

Benefit of the risk process is established in advanced strategic interventions to risk, which unlock value by identifying opportunities that replace value destroyed. The risk process promotes leaders to engage in risk dialogue that develops opportunity risk.

The Capespan risk philosophy promotes a common risk framework and language so that we have a universal risk landscape with a homogenous risk culture across diversified global business strategies.

Risk interconnection and risk aggregation is a vital consideration in a multinational such as the Capespan Group and a mature risk process has evolved that integrates both qualitative and quantitative measures.

RISK MANAGEMENT ROLE IN THE CAPESPAN GROUP

Group risk facilitates a mature and embedded culture by:

  • designing and implementing a formal risk policy and procedure
  • training users in the Capespan Risk Model, risk language and framework in the group
  • provoking a risk thought process that enables achievement of the strategic objectives
  • promoting defensive strategies that aim to protect value and to stabilise the risk
  • promoting offensive strategies that aim at growing value, thus adopting opportunity strategies
  • reviewing the divisional risk scorecards in an effort to align the risks with strategic group risks
  • promoting a homogenous risk maturity and culture in the group

RISK MANAGEMENT IN THE FRUIT DIVISION

Risk management in the Fruit division has evolved over recent years and the universal group risk model as well as the risk framework is embraced by the division and supports a common risk language across the Fruit entities.

Although the entities in the fruit division find themselves in the four corners of the world, they all share common threats and opportunities and it's through risk interconnectivity that the division is able to optimise the value that Risk Management brings to the operational level.

The division is committed to uphold the group risk policy and entrench risk capability across all entities.

In today’s business landscape, a business crisis can cause great damage in a short time. Rapid response and a proactive Risk Management process enable the division to take bold action to manage adverse situations before they become a crisis.

Through Risk Management, the Fruit Division is risk-prepared and this is only possible through a structured process and mature leadership that understands the risks and vulnerabilities inherent in the Fruit Division and responds to opportunities to achieve optimal performance and improved competitiveness.

The Fruit Division’s strategic objective is to instill confidence in all stakeholders, to protect the brand and reputation and to grow shareholder value.

RISK MANAGEMENT IN THE FARM DIVISION

Risk and uncertainty are inherent in agricultural industries. That is why Capespan Farms is increasingly seeking effective and sustainable strategies and approaches to mitigate, transfer, or cope with these inherent risks.

In recent years, we noted that risks facing the agricultural sector have grown and thus effective and integrated Risk Management approaches are non-negotiable.

The multiplicity and simultaneous sources of risk such as weather, market and disease require Capespan Farms to assess its risks continuously.

Group Risk supports the division in risk identification, control and transfer although risks are assessed by individual farmers who then determine a strategy to manage the risk on the farm.

Senior farm management is committed to uphold the group risk policy and entrench risk capability in all its farms across Southern Africa.

STAKEHOLDER ENGAGEMENT

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Stakeholder Engagement

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