At a corporate and fund level, risk management is an integral part of the acquisition, financing and asset management functions. All risks are identified and risk management policies and programs adopted via Cromwell’s Enterprise Risk Management (ERM) system.
The Board in conjunction with the Chief Operations Officer, Compliance Officer, Company Secretary and Finance Director are responsible for managing corporate risk throughout Cromwell.
Risk is managed through a combination of:
- an audit and risk committee, a subcommittee of the Board, to oversee enterprise-wide risk monitoring
- maintaining a risk management/compliance framework as a high level document outlining risk management and compliance procedures
- strict adherence to established processes for all functions
- documentation and regular review of all processes
- outsourcing of risk to contractors and service providers in areas which are not seen as core functions
- designing processes around industry accepted or best practice
- maintaining appropriate insurance coverage
- dedicated internal and external resources employed to conduct audits and review processes with a focus on risk management and continual enhancement.
All property investment involves some degree of risk. Cromwell seeks to identify all possible risks, and wherever possible mitigate or manage the risks. Some risks cannot be managed directly (e.g. macro-economic risk). However risk can be mitigated through financial mechanisms (e.g. maintenance contracts, interest rate hedges, insurance). Cromwell ordinarily adopts a conservative position.
Each decision requires a cost/benefit analysis to be undertaken to ensure that the cost of mitigation is not disproportionate to the risk. Where the cost of risk mitigation is disproportionate to the risk, Cromwell seeks to manage the risk internally through its management processes. In such cases the policy adopted by Cromwell is disclosed in a PDS or otherwise to investors.
Statutory compliance audits are performed on each of our Managed Investment Schemes, including the compliance plans of each of those schemes, and a copy of the external auditors reports for each Scheme are available on request.