DPE Shareholder Oversight

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DPE Shareholder Oversight Risk Management
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SOE Regulatory Environment
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The shareholder has specific powers and
responsibilities in the SOE governance system
Parliament Transparency and accountability
Presidency Performance of Minister of Public
Enterprises
Shareholder Executive Authority
Shareholder Management Defines powers and
responsibilities of shareholder viz a viz the
Board and Management
Companies Act PFMA establishes relationship
Board Accounting Authority
Management Agreement Board cascades delegations
and performance expectations down to management
Management
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The Shareholder is primarily responsible for the
appointment of the Board


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Shareholder Expectations and Governance
Framework Contents

• SOE stakeholder/accountability structure
• DPE Statutory mandate for SOE Oversight
• PFMA National Treasury Regulations
• Company Law

Annual General Meetings
Investor Brief
Quarterly reports and Annual Financial Statements
Strategic Intent Statement
DPE GOVERNANCE TOOLS
Shareholder compact
Significance and materiality Framework
Corporate Plan
Transaction guidelines and section 54 Approvals
Board performance evaluations and attendance
Board appointments and remuneration
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Strategic SOE oversight
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Strategic SOE Oversight Cont

• DPE has developed additional performance
  monitoring and evaluation systems
• Strategic intent statements
• primary communication tool of the States
  expectation of the SOE strategy
• Contains the SOEs strategic purpose, scope of
  business, core business consultation thresholds
  or investment strategy
• DPE to consult with sector and policy department,
  NT and the National Planning Commission to
  determine SOE strategy.
• Investor Briefs
• Issued by Minister to SOE Boards quarterly
  advising them of performance trends and
  highlighting the need for corrective action in
  the event of any deviation from the agreed key
  performance areas and indicators.
• Boards are expected to respond indicating
  measures to address highlighted concerns or
  mitigate emerging risks.

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Performance Monitoring Evaluation

• DPE has an obligation to review the performance
  of SOE.
• DPE monitors SOE performance on a quarterly and
  annual basis.
• Corporate plan risk assessment done in reference
  to the mandate and strategic objectives of the
  SOE (assessment of what events or conditions have
  prevented or what uncertainties could prevent the
  SOE of meeting the set objectives)
• Quarterly annual reports analysed to determine
  whether SOE performance is on track with the
  corporate plans, whether strategic objectives
  have been met and to highlight any emerging
  risks.

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The shareholder management process integrates
national strategic objectives into SOE planning
and operations
DPE reviews SOE performance (Treasury Regulation
29.3) Isibuko Dashboard Minister issues Investor
Briefs to SOE Boards on emerging SOE performance
trends, highlighting need for corrective action
in event of any deviation from agreed key
performance areas and indicators. SOE AGMs. SOE
reporting to Parliament (PFMA Sec 65).


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DPE has developed a comprehensive risk management
framework

• Risk management the comprehensive process of
  identifying, assessing and responding to risks
  is not an end in itself. When undertaken
  effectively, it can deliver a range of benefits,
  by
• improving planning processes by enabling the key
  focus to remain on core business and helping to
  ensure continuity of service delivery
• reducing the likelihood of potentially costly
  surprises and preparing for challenging and
  undesirable events and outcomes
• improving efficiency and general performance
• contributing to the development of a positive
  organisational culture, in which people and
  organisations understand their purpose, roles and
  direction and
• improving accountability and governance in
  relation to both decision-making and outcomes.
  This is particularly important for public sector
  entities, which exist to deliver outcomes for the
  benefit of the public.

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Risk Management

• Key questions to consider in undertaking this
  analysis include
• the type of risk technological, financial,
  safety etc
• the source of risk external (political,
  economic, natural disasters) or internal
  (reputation, security, knowledge management,
  etc)
• what is at risk area of impact and the type of
  exposure (people, reputation, operational
  results, assets etc) and
• the level of control the degree to which the
  agency can influence, affect or manage the risk.

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Risk Management

• The risk management process consists of the
  following main steps
• Objective setting (what is our mandate,
  objectives, etc)
• Risk identification (what can go wrong, what can
  prevent objectives being achieved, causes of
  risk?)
• Risk analysis (what are the chances of the risk
  occurring LIKELIHOOD, what will be the effect
  when it occurs (IMPACT).
• Risk response (avoid, accept, reduce or share the
  risk by developing controls, procedures, etc to
  reduce risk to acceptable levels).
• Control activities (policies and procedures are
  established and implemented to ensure the risk
  responses are effectively carried out).
• Information and communication (information is
  captured and communicated so that people are able
  to carry out their risk management duties).
• Monitoring (ongoing management activities and
  separate evaluations).

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Risk Management

• Isibuko business intelligence dashboard system
  has been implemented to allow for timely
  reporting by SOE and for SOE performance
  assessment by DPE.
• Risk assessed at 3 levels
• SOE
• DPE
• Portfolio

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Risk Identification Description
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Risk Treatment Assessment
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Charts are used to determine the change in
ratings over time
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Risks can be clearly plotted and ranked
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The risk profile of the SOE portfolio seems to be
improving
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Thank You