Risk oversight and management
Risk management and oversight is integral to Telstra's business, and managing risks effectively enables us to achieve our objectives and create value for our shareholders, satisfy our customers, protect our staff, our assets, the community, and the natural environment. Our commitment is to manage those risks that arise in the course of Telstra’s business to an acceptable level, so as to maximise our opportunities and minimise negative outcomes.
Management and staff within each part of our business have primary responsibility to proactively identify risks, choose and implement methods to treat these risks, and monitor their control effectiveness. They periodically review and update the Audit Committee as to their significant business risks. We also have groups assisting to manage and report in specialised areas such as Occupational Health and Safety, Environmental, Treasury, Insurance, Credit and Regulatory risks.
The Risk Management & Assurance group develops and promotes a common risk management language and approach. This group is also responsible for conducting independent risk assessments in key areas and reports its findings on significant risks with an evaluation as to the adequacy and effective operation of controls to senior management and the Audit Committee.
The Board monitors the integrity of internal control and reporting systems and monitors the effectiveness of our management of strategic, financial, operational and compliance risks. The Audit Committee oversees the management of risk within the Company, approves the Company wide risk policy, and reviews trends of the risk profile. Through management reports and independent assessments undertaken by the Risk Management & Assurance Group, the Audit Committee monitors the adequacy and operating effectiveness of the controls that seek to ensure significant risks are managed to an acceptable level.
Risk management, internal compliance, control systems and our financial reports
For the financial year ended 30 June 2007, the CEO and CFO have provided the Board with the certifications required by the Corporations Act and those set out in the ASX Corporate Governance Council’s ‘Principles of Good Corporate Governance & Best Practice Recommendations’ in relation to our risk management and internal compliance and control systems and our financial reports.
Specifically, the CEO and CFO provided the Board with confirmation that, in all material respects, the Company's financial reports for the year ended 30 June 2007 presented a true and fair view of the Company's financial position and performance and were in accordance with relevant accounting standards. The CEO and CFO confirmed this statement was made based on a sound system of risk management and internal compliance and control implemented in accordance with Board policy. In addition, the CEO and CFO confirmed to the Board that the Company's risk management and internal compliance and control systems, to the extent they relate to financial reporting, were operating efficiently and effectively in all material respects based on the risk management model adopted by the Company.
The CEO and CFO were assisted in this confirmation process by the work of:
- the Management Certifications Committee that reports to the CFO and, through him, to the CEO; and
- the Continuous Disclosure Committee (refer below).
