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Strong and effective risk management is central to how we run our business. It supports the achievement of our strategic objectives and protects our business, our people and our reputation. Tullow has a strong governance and risk framework that gives direct ownership of risk and corporate responsibility to the Board and Executive Directors.
Tullow Oil's 2013 short-to-medium and long-term performance terms risks are set out in detail in the 2012 Annual Report. Tullow has a number of specific corporate responsibility risks, in particular EHS failure or security incidents, bribery and corruption, loss of key staff and political and social risks. For more information visit our 2012 Annual Report.
Risk management is the overall responsibility of the Board. Each Executive Director has a defined responsibility and accountability for a specific aspect of the Group's key risks. The Audit Committee also plays an important role.
The Board provides oversight of the strategic direction of the business and approves the annual budget and business plan together with risks to delivery and defined operational targets. Key strategic risks and opportunities are also collated as part of the Board's annual review of Group strategy. Board committees, including the Audit Committee, Nominations Committee, Remuneration Committee and EHS Committee (to commence in 2013), play a key role in reviewing the effectiveness of Tullow's risk management.
Each Executive Director has a defined responsibility and accountability for specific aspects of the Group's risk management and collectively the Executive are responsible for risk assurance in Tullow. On a weekly basis Executive Directors meet to discuss key issues and as required are joined by the Regional Business Managers and key functional managers. This structure, together with monthly and quarterly reporting, leads to an effective two-way exchange of information and ensures coordinated decision-making takes place with a premium placed on risk management. Updates on key risks form part of monthly reporting to the Board and Senior Management on the operational and financial management of the Group.
Regional Business Managers and corporate functions provide collective coordination and oversight of the activities of the Business Units and operational activities of Tullow. A number of cross-functional committees – the GELT , Development & Operations Leadership Team and Financial Risk Committee – provide integrated assurance over the technical, commercial and financial risks. An Information Systems Leadership Group, Compliance Committee and EHS Strategy Group provide oversight of their related risk areas. On a quarterly basis, Senior Management assess the Group's performance through a series of reviews with the Business Units including an assessment of risks to delivery and measures being implemented to manage these potential risks.
Risk is managed on a day-to-day basis by Business Unit Managers through in-country operational monitoring and reporting of asset performance, operational reviews and audits and cross-functional meetings. Formal operational reporting is completed weekly with monthly financial reporting to Senior Management, the Executive and the Board. Each employee is personally responsible for managing risk within the remit of their role.
© 2013 Tullow Oil plc