Market Turnover
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Roles and responsibilities

  • Under the Listing Rules, the board is ultimately responsible for the issuer’s risk management and internal controls.  Effective risk management and internal controls start with the board setting the appropriate "tone from the top" and instilling a commitment to compliance and ethics into the issuer’s culture and operations. 
  • The board should set clear objectives for the issuer, identify existing and emerging risks for such objectives and determine the level of risks it is willing to accept in the course of pursuing the issuer’s objectives.  Based on this analysis and the issuer’s risk tolerance, the board can then work with the issuer’s management on the establishment and maintenance of appropriate and effective risk management and internal control systems. In addition, the board should ensure that its approach to risk tolerance has been properly communicated throughout the organization.
  • While the board may delegate certain aspects of its work to management and relevant departments (e.g. internal audit) or external providers (e.g. internal control consultants), proper oversight over the design, implementation and operational effectiveness of the risk management and internal control systems is ultimately the board’s responsibility. 
  • The board should monitor the issuer’s risk management and internal control systems on an ongoing basis.  A review of the systems’ effectiveness should be conducted at least annually.  For each reporting period, the board should provide a statement in the corporate governance report that acknowledges its responsibility for the issuer’s risk management and internal control systems and confirms that these systems remain appropriate and effective.