Singapore Airlines 2004 Annual Report Download - page 31

Integrated Framework to Manage Risks Effectively
The structured approach described above ensures that the full spectrum of risks at various levels is being managed and monitored.
The integration allows top risks at one level to be surfaced to the next higher level, resulting in efficient allocation of resources
to manage risks. As an example, non-compliance with airworthiness directives (a Process Risk) could result in the grounding
of aircraft amounting to a failure of flight operations (a Business Functional Risk). The integrated approach ensures that the
Process Risk is surfaced and monitored at a higher level. These programmes are now formalized and built into the work scope
of the organization. This ensures that risk management processes are embedded in both upper and lower levels of the organization
and provides a systematic and effective programme to manage risks.
4. Integrated Risk Responses And Business Continuity Plans
With the integrated framework, risk responses that were managed under various business units can be better coordinated and
streamlined. The framework sets the foundation for the integration of Disaster Recovery, Crisis Management and Business
Continuity Plans into a seamless corporate-wide response. Scenario-based Simulation Exercises, currently conducted mainly for
Crisis Management training, will be developed to improve the organization’s multi-prong response to risks in a concerted and
coordinated manner.
5. Risk Processes and Activities
During the year under review, the following risk related processes and activities were carried out:
a) Annual re-validation of CSA
Completed CSA programmes implemented in departments were subject to an annual “refreshment” exercise, to update
the risks and compliance status. Process risks which surfaced that were more significant were then escalated for further
review under the Annual Risk Management Review.
b) Annual Risk Management Review
The SIA Group carried out her 2nd formal Risk Management Review in January-March 2004, to surface risks at Company
levels, before consolidating Group-wide risks for review by the Group Risk Management Committee, and ultimately by the
Audit & Risk Committee.
c) Strategies Formulation and Strategic Risks Review
The SIA Board carried out a review of Group and Company strategy in October 2003, to develop strategies to exploit
opportunities as well as to manage the corresponding risks to the long-term growth and success of the Group.
d) Implementation of Risk Management Framework in More Subsidiaries
The Risk Management Framework was implemented in 3 other subsidiaries of the Group, namely Singapore Flying College,
Singapore Aviation and General Insurance (SAGI) and Abacus Travel Systems, in addition to the 5 companies – SIA, SIA
Cargo, SilkAir, SATS and SIAEC – that implemented it in 2002-03. Risks surfaced by these subsidiaries were consolidated and
reviewed by the Group Risk Management Committee.
6. Board of Directors’ Comments on the practice of Risk Management in the Group
Having reviewed the risk management practices and activities of the Group, the Board of Directors has not found anything to
suggest that risks are not being satisfactorily addressed.
SIA Annual Report 03/04 29