Statement of Intent 2008-11: Part two - Managing in a changeable environment

Risk Management

Achieving our outcomes depends on identifying and treating risks. Our governance and risk management frameworks help us focus on this. We use our governance boards and project steering committees to ensure successful implementation of projects and initiatives.

The Commissioner chairs two governance boards:

• Executive Board-reviews and determines longer term strategy, ethics and integrity, strategic risks and progress towards our desired future and outcomes.
• Management Board-focuses on and manages major operational issues, including business outcomes and outputs, performance risks and engagement survey results.

Three committees support the governance boards:

• Project Governance and Investment Committee-oversees the approval, initiation and implementation of significant projects.
• Technical Governance Committee-coordinates identification, consideration and resolution of important technical matters, especially but not exclusively related to tax.
• Risk and Assurance Committee-provides the Commissioner with independent assurance on the effective and efficient discharge of his statutory responsibilities and accountabilities (this Committee has an independent chairperson and independent members).

Projects are governed through steering committees, which apply a robust project management methodology. This ensures that risks to successful implementation are identified and mitigated.

Risk management framework

Our risk management framework is built around the AS/NZS 4360 Risk Management Standard, which focuses on identifying, analysing and managing risks. The framework:

• is integrated into our planning methodology
• applies to strategic and operational initiatives and projects-see "Managing risks to revenue and compliance"
• allows us to better identify organisational risks and opportunities and develop mitigation strategies
• includes a strong assurance focus that supports a number of the governance committees in fulfilling their roles.

Managing risks to revenue and compliance

We manage risks to revenue and compliance through our Compliance Improvement Committee⁴ that identifies and acts on risks nationally. We have identified a number of risk areas and introduced a work programme to address them, for example:

• property speculation cases-we began research in this area during 2006-07 and further investigation activity will continue throughout 2007-08 and beyond.
• aggressive tax issues-ongoing work to address complex financial transactions (particularly the use of hybrid financial instruments) and lease provisions (including the use of cross-border leases).

Identified risks are prioritised and managed through:

• our national compliance management programme
• the integration of Compliance and Service strategies
• our links with international organisations and other tax authorities.

⁴ This committee is made up of senior managers who have an active role in addressing compliance risk. The committee determines and coordinates the compliance priorities that form the basis of the compliance management programme.

Other pages in: Part two - Managing in a changeable environment

• Environment

Date published: 30 Jun 2008

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