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SIA Annual Report 02/03
28
Risk Management
INTRODUCTION
Following recent developments in
corporate governance, SIA institutionalized
its risk management practices in 2002
under a formal risk management
framework.
RISK REPORTING STRUCTURE
Within this framework, the risk reporting structure of the Group was formalized
by the formation of various Risk Management Committees as follows:
Company Risk Management Committees
Each of the main operating companies established a Risk Management Committee
to drive and oversee the practice of risk management within their respective companies.
Group Risk Management Committee
At SIA Group level, a Group Risk Management Committee was formed, chaired by
the CEO of SIA, and comprising the chairmen of the company Risk Management
Committees as members. The SIA Group Risk Management Committee makes
policies on risk management for the SIA Group, and coordinates risk management
activities at Group level.
Audit and Risk Committee
The SIA Board Audit Committee was renamed "Audit and Risk Committee" after
expanding its scope to include oversight of risk management in the SIA Group.
The SIA Group Risk Management Committee reports to the SIA Board Audit and
Risk Committee on risk matters.
RISK COMMUNICATION
To improve communication of risks within the organization, SIA adopts the concept
that risks may be classed into 4 broad areas, namely:
Strategic (Management) Risk,
Operational Risk,
Financial Risk, and
Regulatory Risk.
The following diagram shows the 4 areas of risk, and the examples of hazards that
may result in damage to the Group in one or more of the 4 areas.
HAZARDS
Financial
Operational
Strategic (Management)
Regulatory
Licenses
Corporate Governance
Financial Accounting
Legal liability
Accidents
Markets
Economic cycles
Environmental liability
Natural catastrophes
Terrorism
Competition
Political events
RISK AREAS
SIA BOARD OF DIRECTORS
BOARD AUDIT AND RISK COMMITTEE
SIA GROUP
RISK MANAGEMENT COMMITTEE
SIAEC
Risk Management Committee
SATS Group
Risk Management Committee
Other Subsidiary
Risk Management Committee
SilkAir
Risk Management Committee
SIA Cargo
Risk Management Committee
SIA
Risk Management Committee