Assignment Task:
Assume you are a risk manager, a qualified MSc graduate from the University of Lusaka, who has recently been appointed by a large South African-owned engineering and general construction company called Randveld Zambia Ltd, a subsidiary of Randveld SA Pty Ltd. Randveld SA Pty Ltd has a number of offices around the SADC region including the Zambian subsidiary.
Due to the anticipated large infrastructure development projects announced by the new government in Zambia, such as the 'Link Zambia', 'Pave Zambia' and creation of new districts, Randveld Zambia Ltd has made a decision to expand its business operations in Zambia and consequently is planning to obtain a listing on the Lusaka Stock Exchange at least in the next 3 to 4 years. This it is hoped will transfer the majority shareholding in the company to Zambian citizens and therefore bringing the shareholding structure of the company in line with the new government's policies which are aimed at empowering the citizens of the country.
Randveld Zambia Ltd is structured around a number of main functional or business divisions including Infrastructure Development, Professional Services, Environmental Services and Facilities Management. Randveld Zambia Ltd operates a number of subsidiary companies that offer a range of services ranging from roads term maintenance contracts for Local Authorities to professional design services. Randveld Zambia Ltd has an annual turnover of around K500 million (rebased) and is generally operating at a reasonable level, although growth has been slightly slower than expected over the past 2 years.
As part of a long-term strategic review, the company CEO, Mr Pik Botha, has decided that the company needs to review its strategic risk management systems to bring them up to the highest operational standards so Randveld Zambia Ltd can compete at the most effective levels possible.
It is expected that the review will require the development of a comprehensive enterprise risk management (ERM) system.
As strategic risk manager for Randveld Zambia Ltd, one of your first responsibilities will be to design a suitable risk management system for the organisation as a whole. This will subsequently be upgraded to a full ERM system over the next year or so after the basic risk management system is in place.
Question:
Discuss the main components that are likely to be included in the risk management system. You should explain what each element or component is and how each relates to the other elements or components that comprise the system.