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RISK MANAGEMENT AND INSURANCE

Harmony’s operations are subject to the provisions of numerous South African acts of law and the regulations promulgated thereunder, the principal acts being the Minerals Act and the Mine Health and Safety Act. The provisions of these acts and regulations ensure that extensive and well managed risk control initiatives are an integral part of Harmony’s operations.

The objective of the company’s risk management programme is to minimise its business risk by safeguarding its assets and revenue, as well as the procurement of insurance for those events beyond the control of management. The Harmony board retains risk management control through the final review of key risk matters affecting the company. The focus of risk management is on identifying, assessing, managing and monitoring all known forms of risk across all business units. Harmony endeavours to minimise operating risk by ensuring that the appropriate infrastructure, control systems and people are in place throughout its business units. Key policies and procedures employed in managing operating risk involve segregation of duties, transaction authorisation, monitoring, and financial and managerial reporting. Financial risks are managed within predetermined procedures and constraints. Compliance is measured through regular reporting against these standards, internal audit checks and external audit verification.

Risk control with regard to numerous potential loss exposures, such as the health and safety of workers and third parties, the protection of assets, the prevention of business interruption losses, the safeguarding of the environment and the minimisation of exposure to civil and criminal litigation are integral aspects of Harmony’s operations.