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Effectiveness of the risk management process

Strengthening the mitigating strategies through the EWRM process has helped in lowering the company’s risk profi le during the year under review. It has also played a key role in furthering the strategic objectives set by the company for the next few years. Diagram 3 shows that key objectives were achieved or there was an improvement in performance in the majority of risk areas when measured against key performance indicators. King III requires that once a year the Board reviews and expresses a view on the effectiveness of the risk management process.

Diagram 3 Summary of Gold Fields’ performance against targets set for financial 2010

 
Strategic objective
   
Risk area
   
Targets set for financial 2010
   
Key risk indicator guideline
 
Performance
        Safety     2013 MHSC* milestone targets     Injury and severity rates    
  SWEAT     Health     2013 MHSC* milestone targets     Illness rates and numbers    
  OUR ASSETS     Environment     Zero Level 4 and 5 incidents     Number of incidents    
        Business plan delivery     95 per cent compliance with     NCE, cash cost, margin, EPS    
              business plan     growth, M2 and development    
                    meters etc.    
                         
        Human resources     60 per cent successor cover ratio     Percentage turnover    
  SECURING     Licence to operate     Full compliance with all legal and     Licences    
  OUR FUTURE           social requirements          
        Ethics/corporate     No material or significant failures     SOX audit results    
        governance                
                         
        Capital projects     Projects to be completed on time     Cost/timeframes, IRR and NPV    
              and within budgets          
  GROWING     Mergers and acquisitions     IRR five per cent brownfields     G-Bar ranking system    
  GOLD FIELDS           IRR ten per cent greenfields          
        Exploration     Leaning towards greater geological     G-Bar ranking system    
              potential in high-risk areas