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02
Value creation
What is material in our
value-creation process?
Telkom’s risk appetite
The risk appetite statement and
tolerance levels are calibrated
againstTelkom’s broad financial
targets, including dividend policy
and operational effectiveness.
The statement is prepared
annually as part ofTelkom’s
planning process, combining a
top-down view of the group’s risk
capacity, with a bottom-up view of
the group’s risk profile.
Risk appetite is determined
directly in relation toTelkom’s
strategy and considered in:
> strategy setting
> resource allocation in proportion
to the contribution of risk
> key management decisions
and actions
Our risk heatmap
Potential
impact
Key actions taken
to enhance risk
management
> aligned the risk management
programme toTelkom’s new
operating model and established
risk management functions
within the respective business
units. The risk governance
structure was enhanced by
establishing business unit
assurance forums
> enhanced the risk quantification
and assessment methodology
to support combined assurance
and developed a technology-
enabled risk assessment
application
> developed and implemented
a regulatory universe for the
respective business units from
a compliance perspective
and compiled compliance
risk management plans for
all priority legislation in the
business units
> developed an ERM risk training
module, which was rolled out to
senior management
Future focus
In order to maintain our current
maturity and improve where
possible, growth and maintenance
strategies will be implemented.
Our focus includes:
> working on the transitional
elements from the current ERM
model to the next-generation
model, which addresses the
transition, risk appetite model
and combined assurance, King
IV best practice, and redefining
operational processes including
roles and responsibilities
> maintaining a converged
approach by aligning
frameworks across all
disciplines, allowing for a
common risk language
> a greater emphasis on the first
line of defence and combined
assurance
> revising the risk appetite
model’s alignment to strategy,
value drivers and business
model
> ownership of risk appetite at
group and business unit level
> deploying our technology-based
risk assessment tool
1
2 3 4
4
3
2
1
Likelihood
Priority 1
Priority 2
Priority 3
Priority 4
Revenue growth and profitability
Customer experience
Voice revenue decline
Human capital health
Procurement and property
Regulatory and compliance
Financial stability
Inefficient outdated IT systems
Information security
Vertically integrated operating model
not sustainable
Non-compliance with Competition
Commission settlement agreement
Network transformation
Business continuity
B-BBEE rating
ERM
– continued