Singapore Airlines 2015 Annual Report Download - page 64

Statement on
Risk Management
1. SIA Group Enterprise-Wide
Risk Management Framework
Since 2002, a formalised Risk Management Framework has
been implemented across SIA Group under which risks
are identified, evaluated and controlled on a coordinated
and integrated basis. Details of the key elements of this
Framework can be found on SIA’s Website1.
2. Highlights of Significant
Risk Management Activities
Over the course of the period under review, the following
were the more significant risk management activities
carried out:
(a) Review of Compliance Risks from Outsourced
Activities
As more functions and activities are outsourced
to service vendors, there is an increased level of
compliance actions that are performed by service
vendors on SIA’s behalf. A review was conducted
to ensure that these compliance activities are
appropriately managed, and the Audit Committee
was updated accordingly.
(b) Review of strategies for managing Information
Technology Risks
A review was performed to look at the strategies to
manage Information Technology Risks, taking into
account developing and possible future threats from a
holistic perspective, to ensure that plans and responses
are developed in a timely manner. Computer Incident
Response capabilities were simulated in exercises and
also reviewed, with the Audit Committee updated on
the outcome of the reviews.
(c) Review of Subsidiaries’ Implementation
of Risk Management Framework
To ensure alignment to SIA’s practices, the risk
management framework and implementation thereof
at some subsidiary companies were reviewed as part
of on-going eorts to identify gaps and shortcomings,
if any, for improvement.
(d) Review of Strategic Investments Risks
In line with the Group’s strategic thrust, investment in
a range of strategic partners was undertaken, and a
review of the risks arising from participation in these
ventures was initiated. As the investment growth is
expected to be on-going, a standing Committee chaired
by CEO was formed to review strategic investment risks.
(e) Review of Risks from Critical Supplier
In view of continuing consolidation and specialisation
of businesses globally, some suppliers to SIA
increasingly pose supply-chain risks that may result in
disruption to SIA’s business. A review was carried out to
ensure good understanding of the critical supply-chain
exposures and the management thereof.
(f) On-going Risk Committee Activities and
Risk Reviews
As part of embedded and on-going activities, the
Board Safety & Risk Committee (BSRC) reviewed top
risks and corresponding controls, including reports
of testing and simulation of business continuity plans
and other risk responses. The BSRC also ensured
that the other Board Committees and the full Board
of Directors were kept informed of the strategic and
other key risks. The SIA Group Risk Management
Committee supported the BSRC in ensuring that risks
are surfaced and reviewed, and risk responses across
the Group were coordinated and integrated, such as
Crisis Management, Disaster Recovery and Pandemic
Response plans. Correspondingly, Risk Management
Committees at company level ensured that the Risk
Management Framework is maintained and risk
management processes are being applied, by reviewing
risks and controls, including identification of new risks
and changes in the evaluation of risks.
(g) Written Assurances of Implementation
of Risk Management Processes
As part of risk governance and assurance, Business
Unit Heads provided written assurances to the Risk
Committees regarding their implementation of risk
management and identification of risks within their
respective business units. Corresponding written
assurances were provided by CEO and by Senior
Vice President Finance to the Board Safety & Risk
Committee.
3. Board Of Directors’ Comments on the Practice
of Risk Management in Singapore Airlines
Having reviewed the risk management practices and
activities of Singapore Airlines, the Board of Directors has
not found anything to suggest that risks, which the Group
considers relevant and material to its operations, are not
being satisfactorily managed.
1. http://www.singaporeair.com/pdf/media-centre/riskmanagementframework.pdf
62 GOVERNANCE | Statement on Risk Management, Corporate Governance Report |