TIO MAC Report Statement of Corporate Intent 1 July 2008-30 June 2009
Tabled paper 541
Tabled Papers for 11th Assembly 2008 - 2012; Tabled Papers; ParliamentNT
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5 GOVERNANCE TIO's Risk Management Framework sets out criteria for the identification and assessment of risk and the effectiveness of mitigating controls. During the year TIO refined the Risk Management Framework and conducted Risk Assessment Workshops with the TIO Board of Directors and Senior Management. The corporate risks identified were allocated to risk owners, they are responsible for periodic assessment of the risk; monitoring the effectiveness of key controls that manage the risk and the development of mitigating controls. The Risk Management Framework establishes TIO's overall Corporate Governance Structure through incorporating the following matters: Governance Structure Governance Framework Compliance Program Rolling three year Internal Audit Plan; and Governance Principles. TIO's compliance program includes quarterly self assessments by the risk owners of Corporate Risks and the effectiveness of key controls. Other compliance activities include assessments of compliance with key regulations such as the NT Treasury Determination. The identification and assessment of TIO's key corporate risks is the main driver of TIO's Internal Audit Plan. During 2008/2009 TIO conducted 14 Internal Audits to assess the effectiveness of controls designed to mitigate key corporate risks. The Internal Auditors noted from these Internal Audits that "nothing had come to their attention that causes them to believe that TIO has not complied in all material respects with the appropriate Standards and internal policies". In March 2009 an internal review identified a control issue with the MAC reserve process, as a result a detailed review was conducted and additional system and procedural controls were implemented. TIO seeks to continually evolve its understanding of risk and the management of its risk profile. A new corporate risk framework will be adopted to recognise and measure risk in the business. To assist in this process TIO has undertaken Dynamic Financial Analysis (DFA) modelling which aims to identify the key sources of volatility in the business and assist in understanding how these can be managed and mitigated through the use of varying capital and reinsurance strategies. The DFA model has been calibrated to represent TIO's business profile; it is a quantitative method of analysing and understanding the large number of interrelated dynamics and sources of risks within TIO and the flow on effect of those decisions impacting the bottom line.