In the field of entrepreneurship
risk and reward are closely linked. Rewards can be generated
only if a business entity is willing to take risks. It is the
capacity to take informed and intelligent Risk Management measures
thatgenerate sustainable rewards that are the hallmark of a
business enterprise.
While all companies take risks, most companies also have in
places systems and controls to mitigate, minimise and manage
risk. The essence of a good Risk Management system is to be
able to identify risks as precisely as possible, to quantify
the impact that risks will have on a company’s performance,
and to generate a capacity within the Company to manage and
control these risks as far as possible.
Business risks are events which have the potential to adversely
impact on the realisation of business objectives. An effective
system of Risk Management would need to identify these events
in advance, predict when they are most likely to occur and prevent
or mitigate the impact of these risks on the organisation’s
activities. An effective system of Risk Management should not
only minimise or reduce risks but also be able to translate
these risks into opportunities for greater rewards.
SLT has put in place systems, policies and procedures in all
of its major areas of operation to identify, measure and monitor
risks in a systematic way. These systems and procedures seek
to generate a uniform interpretation of risk and a synchronised
approach to quantifying the impact of the risk and its management.
These systems and procedures ensure that SLT takes well calculated
risks, but at the same time tries to eliminate certain types
of risks altogether and minimise the impact of others. Our senior
management constantly reports to the Board on the systems being
implemented in their areas of operation. The adequacy and efficacy
of SLT’s Risk Management procedures are constantly monitored
in the light of a constantly changing business environment.
Risks emerge from a variety of sources:
Natural Disasters
Risks from natural disasters such as fire, water and lightening
have the potential to impact on most businesses in varying degrees.
Mitigation measures include comprehensive fire protection systems
and other emergency response mechanisms. In 2003 SLT had to
respond to the floods which devastated much of the Western,
Sabargamuwa and Southern Provinces.
Reputation Risks
SLT’s activities have touched the lives of many stakeholders
including the broader public. We know that we are in a business
area that has an important impact on the lives of ordinary people.
We are conscious of this larger social responsibility and have
taken steps to forge a close relationship not just with our
customers but with larger society as well. We have invested
in the wellbeing of the community including the under-privileged.
We have also invested in the preservation of the environment
for future generations.
However, we are mindful of the fact that because of the nature
of our operations our reputation can change over time and sometimes
very quickly. In this respect we have a major public relations
drive that constantly communicates with the public and explains
the changes that we are constantly bringing about. Whether it
is the introduction of new technology, the expansion of our
network, prices revisions, the introduction of a new billing
structure or a VRS package, we are constantly making attempts
to communicate not just with those affected but with larger
public too.
Risks arising out of Competition
Previously SLT was the only player in the telecommunications
market. This has changed and now SLT has to compete not just
with domestic players but also with international players and
a combination of both international and domestic.
As we have noted elsewhere in this report SLT has taken many
steps to cope and respond to this increasing revenue. This includes
diversifying our lines of business and sources of revenue, continuously
upgrading our technology and network, and developing our levels
of customer service.
Regulatory Risks
The TRC is the statutory body that regulates the telecommunications
industry. Because of SLT’s dominant position in the market
we are sometimes required to conform to standards not imposed
on other players.
We have put in place systems and procedures to ensure that SLT
complies strictly with the standards laid down by the TRC. We
are also developing our capacity to engage with the TRC so that
we can optimise the regulatory framework.
