Strategic objective 5 – manage business risk

2010–11 Objective	2010–11 Target	2010–11 Result
Strengthen our controls against the risk of bushfires.	By October 2010.	Action plan developed to address areas in which the findings of the Victorian Bushfire Royal Commission could help strengthen our existing controls.

Risk management

In 2010–11, Endeavour Energy continued to implement the risk management framework that enables us to identify and manage risks that could affect our customers, the community, the environment, our people, assets and financial resources.

Throughout 2010–11, we reviewed the major risks to achieving our strategic objectives and developed and implemented action plans to help mitigate those risks.

Our management of business risk is based on three key behaviours:

We are aware of our activities, operations and objectives.
We consider what can go wrong and the consequences.
We take action to prevent what can go wrong.

Our current risk management strategy spans the three-year period from 2010 to 2013. Our risk management process is now based on Australian Standard AS/NZS ISO31,000:2009 – Risk Management.

Both the risk management strategy and risk management plan are reviewed by the Audit and Business Risk Board Committee throughout the year. ‘Risk owners’ provide regular reports to management and to the Audit and Business Risk Board Committee on the results of ongoing monitoring and review of risks, and on action plans to manage and mitigate them. This has contributed to the maturing of a culture of risk management in the organisation.

The implementation of the risk management framework, as part of our corporate plan, is reported in our risk management plan. Risks to our corporate plan are continually identified and assessed across eight categories, as shown in this table:

Business risk category	Risk description
Safety	Fatality/serious injury of employee or member of public
Network	Significant customer service supply failure
Financial	Significant unbudgeted loss of value
Compliance	Material breach of legislation or licence
Reputation	Sustained public criticism
Environment	Significant environmental incident
Retail	Significant loss of value
Business strategy	Strategic objectives not delivered and business opportunities lost

Note: Retail was removed from the risk management plan following the sale of our retail business in March 2011.

Incident management and business continuity

Endeavour Energy is committed to maintaining continuity of supply and business systems during network and other events. An important function of our incident management plan therefore is to enable us to mobilise resources, communicate with stakeholders and quickly recover key business processes.

Our incident management plan provides a framework to guide the organisation through major disruptive events. Last year we embarked on a significant program to update and enhance the plan to ensure we are prepared for any type of incident.

Our business continuity and disaster recovery plans for all critical processes and systems are regularly reviewed and tested.

The year ahead

2011–12 Objective	2011–12 Target	2011–12 Reason
Strengthen causal controls to mitigate network bushfire risk.	Implement new competency standards and roll out required training by June 2012.	Bushfires are a major threat to our network and the communities we serve.
Manage risk in transitioning the retail business to Origin Energy.	Implement agreed plan by June 2012.	To ensure a smooth transition and minimal disruption to customers.

Deliver performance through people