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Risk management

Risk philosophy

The group is committed to identifying and managing risk. As such, we apply appropriate corporate governance principles and relevant rules and regulations. The board is responsible for the governance of risk and is satisfied with the effectiveness of the risk management process. The risk committee monitors risk management and is responsible for assessing related plans and processes. A risk register is maintained of significant risks facing the group, and management’s actions to manage these risks within the board-approved ranges of tolerance are monitored.

As a leading media group operating in a competitive and an ever-changing market, the group is exposed to a wide range of risks, some of which may have material consequences.

Identifying risks and drafting plans to manage these risks also form part of each business unit’s business plan.

Risk management policy

The group maintains a transparent risk profile by using a structured, formal and planned approach to risk management. The identification, management and reporting of risks are embedded in its business activities and processes. The group’s risk management policy applies to all operations where Media24 directly or indirectly has more than 50% ownership or management control. The policy applies to risks the group faces in executing its strategy, operations, reporting and compliance activities, and is reviewed annually. The risk committee is responsible for reviewing these processes. The group risk manager advises on, formulates, oversees and manages the risk management system and monitors the group’s risk profile, ensuring major risks are identified and reported at the appropriate level in the group.

Risk framework

The Media24 enterprise-wide risk management framework is designed to ensure significant risks and related incidents are identified, documented, managed, monitored and reported in a consistent and structured manner across the group. It is modelled on the Committee of the Sponsoring Organisations of the Treadway Commission Framework for Enterprisewide Risk Management (COSO ERM), as well as the internationally accepted Control Objectives for Information and Related Technology (COBIT) framework for the governance of information technology. The risk management process is subject to continuous improvement.

Material issues and how we manage these

This section identifies the main risks that may affect the group. It is not intended to provide an extensive analysis and discussion of all the group’s risks. Some risks are not within the control of the group and other factors, besides those listed, may affect the overall performance of the group. Despite the structured approach to risk identification in the group, some risks may be unknown at present and other risks currently regarded as immaterial, may become material in the future.

At present the following major group risks are evident among a wide range of potential exposures:

 
Description of material issue How we manage the issue
Block The group operates in fiercely competitive and sometimes maturing markets.
Block Delivering quality products and services to our customers. Offering a compelling price/value proposition. Innovating ahead of our competitors. Investing in non-traditional areas to diversify the company for future growth.
Block With technology forming such an integral part of our operations, there is a risk that the group may be caught off-guard by new technologies or startups or the speed of development.
Block Fostering a “mobile-first” culture and strategy. Significant investment in digital product offering, content and quality.
Block Operating in the media and entertainment industry in South Africa, the group is sensitive to political and other events that may influence the local and global economy.
Block Building unique relationships with customers through content, social media, special events and digital platforms. Continuously exploring ways to enhance the quality of our offering and developing new target markets.
Block Shrinking circulation and advertising revenues in relation to print publications.
Block Quality and relevant content remain a focus area.
Block Stringent cost control measures are in place.
Block A strategy to diversify revenue streams is in place.
Block There is a risk that our digital operations may fail to reach the scale required to generate substantial profits.
Block All digital assets have been consolidated and/or are being repositioned to build scale and drive revenue.
Description of material issue How we manage the issue
Block The group has substantial foreign currency denominated input costs, eg paper and printing equipment. Unpredicted foreign currency movements against the South African rand may cause substantial losses.
Block A policy is in place to manage foreign currency risk.
Description of material issue How we manage the issue
Block A sudden unforeseen event could damage the group’s assets and interrupt day-to-day operations.
Block Precautionary measures, as well as comprehensive short-term insurance are in place.
Block Software issues could interrupt publishing, printing, distribution and online activities, resulting in loss of income.
Block Rigorous testing programmes are in place and business signoff is obtained before implementation.
Block There is an ongoing quality assurance process.
Block Appropriate IT systems are in place to support the business.
Block Availability of top talent, particularly in digital and ecommerce environments.
Block Talent management strategies and succession planning initiatives are in place. Our extensive training programmes include a two-year management course and we offer journalism, ecommerce and engineering internships.
Description of material issue How we manage the issue
Block An incident at our facilities, causing death or serious injury while on duty as a result of non-compliance with the South African Occupational Health and Safety Act, may lead to criminal liability, fines and penalties to the company, its directors and/or officers. Our journalists are regularly exposed to unsafe circumstances.
Block We perform regular health and safety reviews and staff training. The consequences of non-compliance with relevant legislation are communicated to management and remedial action is taken where appropriate.
Block Protection is arranged for journalists when required.
Block Various external assurance providers access our control measures and risks.
Block Materials and energy used in operations may harm the environment. These include electricity, water, paper, fluids and harmful gases.
Block Our carbon footprint is measured.
Block Paper, as well as dust, is recycled where possible.
Block Waste is disposed of responsibly.
Block Regenerative thermal oxidisers are in place.
Block Toluene is recycled at the Novus Holdings gravure printing presses.
Description of material issue How we manage the issue
Block Non-compliance with a range of regulation and legislation could result in financial penalties.
Block A regulatory and legal compliance programme is in place.
Block Active participation in regulatory matters.
Block Published articles might be defamatory and/or provide an inaccurate account of actual events. Defamation lawsuits can result in significant losses and reputational damage. A much stricter press code is in place.
Block Editorial processes ensure the highest standards.
Block Legal counsel guides journalists and editors on articles that may be defamatory.
Block Short-term insurance is in place.
Block Newspapers have ombudsmen in place.
Block All our publishing units subscribe to the South African Press Code and training programmes are in place.