Risk Management Policy
Risk Management Policy
BBP has adopted a Risk Management Policy, consistent with Australia/New Zealand Standard 4360, which clearly defines responsibilities for managing risk under the BBP’s risk management framework.
BBP’s Risk Management Policy aims to establish a sound system of identifying, analysing, evaluating, treating, monitoring and communicating risk. The Policy is intended to:
- provide a framework for identifying, assessing, monitoring and managing risk;
- communicate the roles and accountabilities of participants in the risk management system; and
- highlight the status of risks to which BBP is exposed.
Specific matters covered in the Policy include:
- the BBP risk management framework, including the roles of the Board and specific senior managers responsible for implementing and managing the risk management framework;
- in relation to BBP’s status as a listed entity, BBP’s management of its responsibilities concerning the risk management principles outlined in the ASX Corporate Governance Council’s Principles of Good Corporate Governance and Best Practice Recommendations;
- procedures relating to identifying, assessing and managing risks to the business;
- management of the residual risks and maintaining a Risk Register, Risk Profiles and Action Plans for reporting these residual risks to senior management, the Audit, Risk & Compliance Committees, and the BBP Boards; and
- the role of the Auditor in assessing the overall management of risk and key internal control systems by BBP.
Furthermore, the Manager (Babcock & Brown Power Management Pty. Limited) also plays an important part in the management of investment risk for BBP. In accordance with the respective Management Agreements with the BBP entities, the Manager initially reviews all potential investments of BBP to determine whether these meet BBP’s investment criteria. Potential investments that meet these criteria are then recommended to the BBP Boards for consideration by the Boards.