Risk is Everywhere Few care to recognize it even less exploit it well'

1
Risk is EverywhereFew care to recognize iteven
less exploit it well.
WHY?
Mike A Rossouw 16 October 2007
2
A Failure to Communicate
The New Religion of Risk Management PL
Bernstein HBR 1996 Have we replaced the old
world superstitions with a Dangerous reliance on
numbers?
3
Its not what we sayIts what they hear
4
Effective Leadership Management
A false balance is an abomination to the LORD,
but an accurate weight is his delight - Proverbs
111
5
If you dont know where you are going any road
will take you there
Its all about OBJECTIVES
6
Sustaining Winning RUGBY

• OBJECTIVES
• More Tries than the Opposition
• Less Transgressions than the Opposition

7
Examples ofThe True Context for Enterprise
Risk Management
Sensible Planning and Budgeting
Strategic Conversations
Performance Management
Advance Organisation Knowledge
Prioritizing Work Allocation of Resources
8
Embedding ERM
Use ERM to Create Strategic Conversations
Coach ERM
Contextualize with Objectives Targets
Avoid the Religion of Numbers
Continues Improvement Review, ReviewReview
9
Realism of Plan , Objectives Targets

• Step 1 Identify the Key OBJECTIVES
• Metal Prices
• Sales
• CAPEX
• OPEX
• Time When Production Commences
• Time to Ramp Up
• Rate of Production _at_ Steady State
• Plant Reliability (OEE)
• Product Quality (Reserves, Resources, Grade,
  Recovery, Yield)
• Sustainability
• Safety, Health, Environment and Community
• Suppliers Supplies
• Reputation
• Governance
• Political
• Economical (Exchange rates, inflation rates etc)
• Social
• Legal Regulatory

10
Performance Management
GROUP
KPIs
KPAs
Measurement, Target _ _ _ _

• Safety
• Health
• Environment
• Community

SUSTAINABLE DEVELOPMENT

• Equity market rating
• Shareholder returns
• FTSE/JSE Sustainability Index
• Mining Charter BSC

REPUTATION

• Projects
• Acquisitions
• Capacity Utilization
• Employee development index

GROWTH
Vision Values

• Volumes mined/processed
• Costs
• Efficiencies
• PGE volumes
• Recoveries
• Yields
• Grade
• WIP
• Visual Workplace

OPERATIONAL EXCELLENCE

• Demand and Supply Forecasts
• Price Forecasts
• Sale Volumes
• Prices
• Revenues

MARKETING AND SALES
11
Advance Organisation Knowledge
RESOURCES

• Energy Physical Human
• Assets
• Materials
• Money
• Information Knowledge

The Enterprise
PROCESSES
SYSTEMS
PEOPLE
VISION MISSION GOALS

• Energy Physical Human
• Assets
• Materials
• Money
• Information Knowledge

12
Risk Assessment The Safety Risk Heat Map (2002
to 2007)
The 7 Activities that contributed 83 of all
LTIs in 2007!
13
Practices Yields Results
Best In Class
World class

• For example
• Medical Treatment Cases
• LT Injuries
• Fatal Injuries
• ETC

Lagging Indicators
Results
Cannot go the distance
Only practicing
Best In Class
Practice Maturity The leading practices

• See Practice Maturity Model

Leading Indicators
14
Inherent/Residual Risk
15
Strategic Safety Conversations
16
Funnel of Growth Prospects and Projects
ABC
AABB
OINPP
1775
KKMMJJO
CDE
HOTEL
SALT
ZRE
PAPPA
RTERTY
16
LOPIKUJ
P2
185
ROMEO
ALPHA
RTU
NMOKP
20
PPOP
YUUTY
CDRETY
BRAVO
INDEX

MMMMM 2
XXXCRTY
QUEBEC
BBYHU
UUUJYO
SOOMMNYI
BNKIJ89
90
W
LION
Hydro
ALPHA
ZEBRA
Nuclear
LIMA
NOIP
BOPPTT
NIOPUU
Gas
90
Coal
17
END