At a corporate and fund level, risk management is an integral part of the acquisition, financing, asset management and back office functions. Risks are identified and risk management programs adopted in accordance with Cromwell’s Enterprise Risk Management (ERM) framework.
The Board is primarily responsible for managing corporate risk throughout Cromwell. However, the CEO and executive management have day-to-day responsibility for the identification and management of risks in their area.
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 which outlines risk management procedures
- strict adherence to established processes for all functions
- documentation and regular review of all processes
- 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 those risks can usually be mitigated through financial or other 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 likelihood and consequences of the risk. Where the cost of risk mitigation is disproportionate to the risk, Cromwell seeks to manage the risk internally through its management processes.
Statutory compliance audits are performed on the compliance arrangements of each of our Managed Investment Schemes and a copy of the current external auditors report for each Scheme is available on request.