The document discusses global and South African business risks, integrated reporting, and risk management strategies. It provides tables outlining the top 10 global and South African business risks in areas such as the economy, society, environment, and politics. These include issues like unemployment, income disparity, governance failures, and extreme weather events. The document advocates for integrated reporting to improve communication between companies and markets regarding financial and non-financial risks and opportunities. It also discusses building organizational resilience through long-term thinking and elevating the chief risk officer role. Effective risk management strategies include mitigation measures, accountability, supply chain diversification, and crisis management planning.

1. Global Risks 2014 & Integrated Reporting
Presenter: Myron. D. B. Betshanger
“A Ounce in Prevention is Better than a Pound in Cure”

2. Table 1: Ten Global Risks of Highest Concern
in 2014 Global Risk
Table 2. South Africa’s Top Business Risks 2014
1. Fiscal crises in key economies 1. Difficulties In Accessing Capital Markets By S.A. Businesses
2 Structurally high unemployment/underemployment 2. Structurally High Unemployment & Underemployment
3 Water crises 3. Severe Income Disparity
4 Severe income disparity 4. Food Crises
5 Failure of climate change mitigation and
adaptation
5. Failure of climate change mitigation and adaptation
6 Greater incidence of extreme weather events
(e.g. floods, storms, fires)
6. Impact of Extreme Weather Events on S.A. Businesses
7 Global governance failure 7. (Corporate) Governance Failures
8 Food crises 8. Growth / Increases In Business Corruption / Fraud
9 Failure of a major financial mechanism/institution 9. Profound Political & Social Instability
10 Profound political and social instability 10.
Massive incidence of data fraud/theft

3. Economic Risks Societal Risks Geopolitical Risks Technological Risks Environmental Risks
1. Liquidity crises 1. Severe income disparity 1. (Corporate) governance
failures
1. Increased incidence of
data fraud/theft
1. Greater incidence of
natural catastrophes (e.g.
earthquakes, tsunamis,
volcanic eruptions,
geomagnetic storms)
2. Structurally high
underemployment
2. Mismanaged / Lack of
adequate Corporate Social
Responsibility (e.g. planning
failures, inadequate
implementation
/infrastructure )
2. Increasing corruption
among S.A. Businesses
2. Breakdown of critical
information infrastructure
and networks
2. Greater incidence of
extreme weather events
(e.g. floods, storms, fires)
3. Failure/shortfall of critical
infrastructure
(e.g. weak supply chains)
3. Structurally high
Unemployment
3. Escalation of economic
and resource
nationalization
.
3. Failure of climate change
mitigation and adaptation
4. High cost of Energy /
Fuel to S.A. Business
4. Unmanageable burden of
chronic disease
4. Political collapse of a
nation of geopolitical
importance
5. Pandemic outbreak 5. Violent inter-state conflict
with regional
consequences
6. Profound political and
social instability
6. Large-scale terrorist
attacks

4. The S.A. Risks Interconnections Map
Breakdown of critical
information infrastructure
networks
High cost of Energy / Fuel to S.A. Business Failure/shortfall of critical Infrastructure
Corruption
Corporate Governance
failures Escalation of economic & resource
Liquidity Crises nationalization
High Unemployment Levels Profound Income Disparity
Political & Social Instability
Structural Underemployment

5. Countries with Social Unrest in 2013 (selected)
COUNTRY FOCUS AREA No. Of Participants
1. Egypt Leadership 3,000,000
2. Turkey Urban Development & Civil Liberties 2,500,000
3 Brazil Bus Fares & (Anti-) Corruption 1, 000, 000
4. Argentina Judicial System 1, 000, 000
5. Ukraine Economic Alliances 350, 000
6. Chile Inequalities in Education System 150, 000
7. Thailand Corruption Amnesty Bill 150, 000
8. Russia Political Prisoners 50, 000
9 South Africa Labour Unrest ( & Sporadic Political Unrest) 50, 000 ( 80, 000 = 2014 Platinum Mining Sector*)
10 Bulgaria Energy Bills & (Anti-) Corruption 30, 000

6. South African Business Risks In Terms Of Likelihood & Impact
Risk Likelihood Impact Severity on Business Reputation
1. Labour Protest Action / Unrest Very High Very High Critical
2. Increase Political & Social Instability High High High
3. Structural Underemployment Medium / High Medium / High High
4. Increase Unemployment Medium / High Medium / High Medium / High
5. Income Disparity Medium / High High Medium / High
6. Corruption Medium / High High High
7. . Governance Failures Low / Medium High High
8. Escalation in Economic & Resource
Nationalization
Medium High High
9. Fiscal / Liquidity Crises Low / Medium Very High High/Critical
10. . Greater incidence of extreme weather
events (e.g. floods, storms, fires)
Medium High High

7. Increases in Corruption & Fraud Among S. A. Businesses
Types of Economic Crime experienced by South African Businesses:
- Asset misappropriation 77% (69% *)
- Procurement fraud 59% (29%*)
- Bribery and corruption 52% (27%*)
- Human resources fraud 42% (15%*)
- Cybercrime 26% (24%*)
- Money-laundering 14% (11%*)
- Tax fraud 11% (6%*)
- Illegal insider trading 9% (5%*)
*Indicates Global Averages.
Data provided by PwC – Global Economic Crime Survey 2014 available at http://www.pwc.com/gx/en/economic-crime-survey/
downloads.jhtml

8. Addressing Corporate Risks Through Integrated Reporting
What Is Integrated Reporting ?
 Integrated Reporting is about better communication between companies
and the capital markets.
 The International Integrated Reporting Committee sets out Five Guiding
Principles and Six Content Elements for an Integrated Report:
Guiding Principles Content Elements
1. Strategic Focus 1. Strategic objectives
2. Future Orientation 2. Future outlook
3. Connectivity of Information 3. Performance
4. Responsiveness and Stakeholder
Inclusiveness
4. Governance and remuneration
5. Conciseness, Reliability and
Materiality
5. Operating context, including risks and
opportunities
6. Organizational overview and business
model

9. In Summary:
• Integrated Reporting is intended to improve communication between
companies and capital markets
• An Integrated Report provides financial and non-financial information of a
company’s strategy, performance and governance in its business and social
context, in a way that highlights the interdependencies of the information.
• Organizations would need to explain their business model, and how they
create value over the short, medium and long term
• There is no standard format for an Integrated Report, but the IIRC has
provided Guiding Principles for an Integrated Report
• Integrating Reporting is in its early stages and is still under development in
practice. Those companies willing to experiment and innovate have the most
to gain.

10. Difference Between Current Reporting & Integrated Reporting
Feature Current Reporting Integrated Reporting
Trust Narrow disclosures Greater transparency
Stewardship Financial All forms of capital
Thinking Isolated Integrated
Focus Past, financial Past and future; connected;
strategic
Time frame Short term Short, medium and long term
Adaptive Rule bound Responsive to individual
circumstances
Concise Long and complex Concise and material
Technology enabled Paper based Technology enabled

11. Successful Integrated Reporting Teams Require –
1. breakdown of Corporate silos,
2. integrated thinking and integrated management in the
organization, and
3. the different disciplines within the business to work together.
Successful Integrated Reporting Teams includes Functions
Finance Performance Reporting
Sustainability (Safety, Health,
Environment & Quality)
Operations Management
Risk Management & Strategy Governance & Regulatory Compliance
Corporate Communications & Investor
Relations
Human Resources
Stakeholder Engagement Information Technology

12. Linking Risks To The Corporate Integrated Report
Guiding Principles Content Elements Critical Risks
1. Strategic Focus 1. Strategic objectives Finance – Liquidity, Labour, Usage of
All forms of capital
2. Future Orientation 2. Future outlook Sustainability (Safety, Health,
Environment & Quality)
3. Connectivity of Information 3. Performance Labour Protest Action / Unrest /
Structural Underemployment
Governance failures /
Corruption / Fraud
4. Responsiveness and Stakeholder
Inclusiveness
4. Governance and remuneration Severe income disparity /
governance failures / Mismanaged /
Lack of adequate Corporate Social
Responsibility
5. Conciseness, Reliability and
Materiality
5. Operating context, including risks and
opportunities
Economic Risks/ Societal Risks/
Geopolitical Risks/ Technological
Risks
Environmental Risks
6. Organizational overview and business
model
Failure/shortfall of critical
infrastructure
(e.g. weak supply chains)

13. Building Organizational Resilience - Towards a Culture of Long-term Thinking
“Open dialogue about risk is important not only outside a company but also within it, to ensure that the
board of directors, C-suite and employees share a common understanding of the organizational
approach. In fact, more boards are becoming proactive by asking management what the firm is doing
to handle global risks as part of their overall strategy. “
Elevating the Role of Chief Risk Officer to C-Suite
“The role of chief risk officer, reporting to the chief executive officer and the board, is an
institutional acknowledgement of the challenges in combining long- and short-term thinking”
Ultimately, leaders in the private sector need to be able to ask themselves concrete questions:
- What are the top five risks facing the organization and what does its risk appetite
suggest with respect to managing them?
- What are the exposed assets, and how vulnerable are they?
- What options can address these risks relative to what is being done currently?
- What support is needed, and from whom?

14. Disaster Governance = Risk Management + Crisis Management
“Disaster Governance” - coordinating diverse efforts among multistakeholders within
corporation to coordinate corporate recovery efforts
“Risk Management” - guided by a firm’s risk appetite - the level of risk an
organization is prepared to accept to achieve its objectives,
such as profitability and safety goals
“Crisis Management” - A crisis-management strategy complements a firm’s risk-management
strategy by defining roles and decision-making
procedures for preserving the continuity of business
to reduce the economic, social and reputational impacts
to the firm in the event of an emergency

15. Examples Of Risk Management Strategies
Mitigation measures
Accountability measures
Supply-chain diversification
Avoiding less profitable risks
Transferring the risk
Transferring the risk
Early warning systems
Simulations and tabletop exercises
Back-up sites

17. Thank You
Myron . D. B. Betshanger
Corporate Governance & Strategic Management, Ethics, Compliance
& ERM Specialist, and Anti-Corruption Specialist, Procurement / Supplier Quality Assurer.
Cell. 076 228 6088 / 074 780 3862
E-mail: betshangermyron2@gmail.com
@betshangermyron
LinkedIn: http://www.linkedin.com/pub/myron-duncan-burton-betshanger/37/219/1b8