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COSCO Corporation (Singapore) Limited
INTRODUCTION
Risk management and internal controls have been the
main focus of the various objectives of the Corporate
Governance Council (“CG Council”) to raise the
standard of corporate governance in its recent Code
of Corporate Governance (“CG Code”) revision. In
the 2012 CG Code, the CG Council introduced the
revised Principle 11 to focus on Risk Management
and Internal Controls. Immediately on 10 May 2012, a
Risk Governance Guidance for Listed Boards was also
released by CG Council. These efforts by CG Council
are aimed at providing guidance to listed companies’
boards and management on risk management which
aims to ultimately contribute to better and sustained
value to investors, raise investor confidence and
enhance Singapore’s reputation as a leading and trusted
international financial center.
At COSCO Corporation (Singapore) Limited , the Board
of Directors (“Board”) believes that good corporate
governance is an effectual balance of promoting the
long-term success of the Company and providing
accountability and control systems which are symmetric
with risks involved. It is essential to facilitate effective,
entrepreneurial and prudent management.
The Board has delegated the risk management and
internal controls of the Group to an Enterprise Risk
Management Committee (“ERMC”). In the ever-changing
business environment, the risk management process
of the Group is constantly reviewed and updated by
the ERMC. The risk management process is aiming
to identifying the risk factors that may have a material
impact on the Group’s operation, and to manage them
appropriately.
The Company has adopted an Enterprise Risk
Management Policy in August 2012 aims to:
• provide a consistent and structured philosophy and
process in managing COSCO’s risks;
• enable a uniform approach in prioritising, managing,
monitoring and mitigating COSCO’s risks; and
• establish clear responsibilities, lines of authority,
accountabilities and decision making processes.
With the above policy, the risks identification and
management have been carried out and placed under
the purview of the ERMC.
The material risk factors identified by the Group’s risk
management process are set out below. Each of these
could have a material and adverse impact on the Group,
including its business, financial condition, results of
operation and prospect. These risk factors have been
divided into four categories: external; internal; execution
and financial.
RISK MANAGEMENT PROCESS
The ERMC has delegated the day-to-day management
of risk within the Group to the Risk Management
Committee (“RMC”) of each of its operating subsidiaries
and each RMC comprises senior management staff of
the respective division within the operating subsidiaries.
The ERMC also engages Deloitte & Touche Enterprise
Risk Services Pte. Ltd. to perform strategic risk profiling
in the Group’s major subsidiaries. As the Group’s
enterprise risk management programme is a long-term
initiative that calls for commitment and inputs from
various stakeholders, the enterprise risk management
policies have been implemented in phases with guidance
from Deloitte & Touche Enterprise Risk Services Pte.
Ltd. in a systematic manner and coupled with constant
education and training of local management staff and
risk owners.
The Board currently conducts periodical reviews
of the risks and it identifies the key risks for the year
ahead to stay current with the ever-changing operating
environment. As part of this review, operational and
strategic risks are proposed as key risks by the RMC,
based on inputs from regions, function heads and
business leaders. The risk factors set out below reflect
the key risks identified. Each of the key risks is assigned
to the Chairman of the RMC at the operating subsidiaries
who proposes a level of risk the Group is willing to take
and develops appropriate action plans to mitigate the
risks. All risk mitigation plans are reviewed and agreed
by the Board.
Risk
Management
Corporate Governance and Transparency
