The Board believes that an enterprise-wide approach to risk management allows the Company to assess and mitigate risks most efficiently and effectively. The Board therefore expects management to:
- maintain a framework that ensures we manage and mitigate risk effectively and in a manner that creates the greatest value;
- integrate procedures for managing and mitigating risk into all our important decision-making processes so that we reduce the effect of uncertainty on achieving our objectives;
- ensure that the key controls we rely on to achieve the Company’s objectives are actively monitored so that they remain effective; and
- provide assurance to the executives and relevant Committees of the Board of Directors on the effectiveness of key control activities.
By simplifying our head office and eliminating management layers between it and the mines, we have accelerated the pace at which information flows between them. This nimble structure enhances our risk management processes by promoting faster information sharing and greater transparency. Risks facing the operations and organization more broadly are reviewed during the weekly Business Plan Review (BPR) meetings. The Investment Committee, as well as the Value Assurance Review (VAR) process which supports it, ensures that a high degree of consistency and rigor is applied to all capital allocation decisions based on a comprehensive understanding of risk and reward. The VAR process is a comprehensive technical peer review through which all projects are assessed prior to evaluation by the Investment Committee. During the VAR, in addition to review of all technical aspects of a project, options, risks, and opportunities are analyzed.
The Board and its Committees are responsible for overseeing the Company’s enterprise risk and internal control frameworks, risk management and major financial risks and financial reporting exposures, the alignment of Barrick’s executive compensation programs with strategic priorities, and the development of risk management programs relating to Barrick’s environmental, health and safety, corporate social responsibility, security, and human rights exposures. The Risk Committee assists the Board, among other things, in overseeing the Company’s management of enterprise risk as well as the implementation of policies and standards for monitoring and mitigating such risks. During 2017, we continued to improve the quality of risk information provided to the Risk Committee to ensure the Committee is provided with concise and relevant risk information that facilitates meaningful discussions about key risks facing the organization and how they are being managed. In-depth briefings are provided on specific topics to provide a more detailed understanding of risks, and management’s risk mitigation strategies, where appropriate. During 2017, in-depth briefings were provided to the Risk Committee on a range of topics, including geopolitical risk, cybersecurity, tailings storage facility stewardship, and Barrick’s anti-corruption program. The Company’s risk management framework was also further enhanced through the implementation of a structured Critical Controls Management approach for material risks, which will continue in 2018.
With respect to climate matters, the Board’s Corporate Responsibility Committee meets at least quarterly and is responsible for overseeing Barrick’s policies, programs, and performance relating to climate change. Climate change is a risk that is assessed during the formal risk management process, the outputs of which are reviewed by the Risk Committee on a regular basis. The Audit Committee reviews the Company’s approach to climate change in the context of our disclosures.
During 2017, further improvements were made to the quality of risk information provided to the Risk Committee of the Board. The risk reporting process has continued to evolve with a greater focus on enterprise level risks such as geopolitical risk and risks associated with the Company’s digital environment (e.g., cybersecurity) and transformation. The Company’s risk management framework was also further enhanced through the implementation of a structured Critical Controls Management approach for material risks which was rolled out in 2017 and will continue in 2018.
At the management level, our Climate Change Committee is chaired by our Chief Sustainability Officer and is comprised of senior members of our management team including our Chief Innovation Officer; Chief Investment Officer; Executive Vice President and Chief Financial Officer; and Senior Vice President, Operational and Technical Excellence. Our Climate Change Committee provides strategic oversight and governance over key decisions related to Barrick’s climate change strategy, such as overseeing climate change risk and opportunities assessment, monitoring progress against greenhouse gas emissions targets, and providing guidance on external disclosures. In 2017, under the direction of the Climate Change Committee, we performed a climate change risk assessment to identify and assess risks and opportunities across potential regulatory, reputational, and physical risks related to climate change, considering both existing and emerging regulatory requirements (e.g., carbon tax, cap-and trade) to limit greenhouse gas emissions. The Company has set a goal to keep its current greenhouse gas (GHG) emissions flat in the short-term and is targeting a 30 percent reduction in GHG emissions by 2030 from a 2016 baseline. Also in 2017, we affirmed our commitment to support the voluntary recommendations of the industry-led Financial Stability Board Task Force on Climate-related Financial Disclosures (TCFD) and will seek to implement the full recommendations of the TCFD over the next two years. For a more detailed description of our risk oversight processes, please see Risk Oversight.
The diagram below summarizes our enterprise-wide approach to risk oversight and the allocation of risk oversight responsibilities.