Approach to risk management
Meridian operates an active programme to ensure ongoing risk management across the Group. The Risk Management Policy has been developed to meet the New Zealand Standard: "AS/NZS ISO 31000 Risk Management – principles and guidelines".
The purpose of the Risk Management Policy is to embed within Meridian a group-wide capability in risk management which provides a consistent method of identifying, assessing, controlling, monitoring and reporting key risks that may impact on the company’s ability to achieve its objectives and/or protect its people, assets or reputation.
Risk management responsibilities
Risk management is ingrained in strategic and operational activities, including business planning, investment analysis, portfolio and project management and day-to-day operations. Meridian adopts a managed approach to risk that sets tolerances for appropriate risk taking, acceptance or avoidance, depending upon the consequences and likelihood of risks’ occurrence, and the potential associated benefits or opportunities.
Meridian’s policies, including the Delegation of Authority Policy, provide a framework for decision-making and risk management.
In respect of all treasury activities to be undertaken by Meridian and its subsidiaries, the Board has approved policies and procedures to ensure Meridian’s treasury operations are conducted in a risk-averse, non-speculative manner. This includes measuring, monitoring, controlling and, where relevant, reducing all financial risks within the Meridian group, including but not limited to, funding, interest rate, currency and liquidity risks.
The Audit and Risk Committee has overall responsibility for ensuring that management’s risk management framework, including policies and procedures, is appropriate and that appropriately identifies, considers and manage risks.
The Audit and Risk Committee reviews the company’s risk profile regularly. The Audit and Risk Committee also receives reports on the operation of risk management policies and procedures. The internal audit function reports to the Audit and Risk Committee on the extent and effectiveness of Meridian’s risk management programme. The Committee reports this information to the Board.