Risk Management

Securing the viability of the business into the long-term

Effective risk management is key to ensuring the continued long-term viability of the Group. It is embedded throughout all of our operating companies. Sustainability issues, including climate change, political and regulatory risks and emerging risks such as climate resilience and biodiversity, are particularly relevant in this respect. The Board of Directors and the management of each division are responsible for identifying and analysing the risks (including those relating to sustainability) underlying the achievement of business objectives and for determining how such risks should be managed and mitigated.

There are two key management committees which seek to monitor the risks to which the Group is subject; the Group Risk Management Committee ("GRMC") and the Finance Committee. These are comprised of members of senior management and both are chaired by the Corporate Development and Finance Director, who reports significant matters to the Board as they arise.

The GRMC is made up of divisional chief executives and managing directors, who also report directly to the Board. Duties of the GRMC include reviewing risk registers from management concerning the implications of new and emerging risks, including:

  • Physical and reputational issues that arise from the social and environmental impact of our business decisions;
  • Setting Group risk management policies and strategies;
  • Advising the Board on Swire Pacific’s overall current and future risk appetite; and
  • Overseeing the Group’s committees and working groups the responsibilities of which are relevant to risk management.
RISK GOVERNANCE STRUCTURE

Enterprise Risk Management

We use a comprehensive Enterprise Risk Management (ERM) system to identify, aggregate, monitor and manage risks. The implementation and execution of the ERM system follows our Enterprise Risk Management policy. The objective of the policy is to ensure that robust and effective risk management systems are in place to enable management to identify, prioritise and mitigate the full range of risks to which our operating companies are exposed.

Under the ERM policy, each division and major operating company is required to implement the ERM process by, at a minimum, annually assessing, prioritising, mitigating and/or managing the existing and emerging risks it faces.

As part of this policy, operating companies are required to submit corporate risk registers to Swire Pacific on an annual basis. In order to ensure consistency of approach, these registers are prepared using the Group’s standard methodology, format and risk ranking criteria.

Policy Review Process

We conduct regular reviews of our policies with input from the relevant governance bodies and our Board. The management of risks and the implementation of sustainability policies is subject to scrutiny by our Internal Audit department, with support from specialist external consultants where necessary.

Further discussion of our approach to risk management and financial risk management is in the Risk Management section of the Corporate Governance Report in the Swire Pacific Annual Report 2016.

 

GALLERY

A biodiesel tri-generation system to be installed at the Taikoo Place redevelopment will supply combined heating, cooling and power generation, contributing up to 2% of the building energy requirements.

GALLERY

Cathay Pacific and Cathay Dragon’s new Economy Class cabin, which was first introduced in 2012, features carpets produced from regenerated nylon waste materials, such as discarded fishing nets, fabric and carpets.

Photo circa 1975

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