Risk Management and Materiality
Gold Fields uses a set of four well-defined processes to assess its risks, opportunities and material issues:
- Key risks and mitigating actions are identified using an Enterprise-wide Risk Management (ERM) process as well as the risk management requirements of South Africa’s King III and King IV governance codes
- The Group takes into account the views and concerns of a wide range of stakeholders
- As part of the integrated reporting process, the Group conducts comprehensive interviews with key management and external stakeholders
- Material sustainability issues are assessed and prioritised according to the Global Reporting Initiative (GRI) G4 Guidelines
The outputs from these four processes have informed the identification of the risks, opportunities and material issues listed on this page.
Gold Fields’ mature ERM process is aligned with the ISO 31000 international risk management standard, as well as the risk management requirements of South Africa’s King III and King IV governance codes.
The Group risk heat maps can be viewed on our latest Integrated Report 2016:
- The Group’s top 10 risks as well as top five risks per region, as identified through the ERM process (i.e. the Group’s top strategic and operational risks at the end of 2016
- Key movements in the top 10 Group risks between 2015 and 2016
- Key mitigating strategies to avoid and/or mitigate the top 10 Group risks for 2016, and the top five risks per region
Gold Fields has carried out a formal process to assess and prioritise its material sustainability issues. It has done so using criteria aligned with those set out in the GRI G4 Guidelines taking into account the actual or potential impact of these issues on Gold Fields and its stakeholders
The process is based on a series of iterative assessments using a common, quantitative scoring framework. It draws on a range of internal and external sources, as well as detailed engagement with senior executives at the Company and representatives of external stakeholders – including industry, government, community and environmental organisations. These stakeholders were briefed on the GRI process and asked to evaluate all G4 aspects in terms of importance to Gold Fields and its stakeholders.
The outcome – depicted in the Integrated Annual Report – ranks health and safety, water management, environmental and compliance issues as the key GRI aspects that internal and external stakeholders consider most material to Gold Fields and its wider stakeholder base.
Risk appetite and tolerance
The Gold Fields strategy, as encapsulated by our DNA, is fully aligned with our risk appetite.
Gold Fields’ risk appetite is defined as the amount of risk the Company is willing to take in pursuit of our strategic objectives and the amount of risk we are capable of taking considering our financial and operational capabilities.
Our risk management motto of “making it less risky to take risk” implies that we have precise and effective risk mitigating strategies to continually reduce risk to an acceptable level. We believe we are inherently more risk averse than many of our peers.
Risk tolerance levels are set in each of our major risk areas aligned to the Gold Fields DNA, such as safety and health, production, growth and productivity, environment, human resources as well as our legal and social licences to operate.
Risk appetite and tolerance levels are reviewed by management and adjusted annually as part of our risk management plan, after which they are reviewed and approved by the Board. Management’s mandate is to take risks only if they fall within these tolerance levels.