Singapore Airlines 2009 Annual Report Download - page 31

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STATEMENT ON RISK MANAGEMENT
1. SIA GROUP RISK MANAGEMENT FRAMEWORK
Since 2002, a formalized Risk Management Framework has been implemented across SIA Group under which
risks are identifi ed, evaluated and controlled on a coordinated and integrated basis. All business units are
involved in identifying and evaluating risks from the bottom up, and these risks are then reviewed by Risk
Management Committees at Company and Group level to provide a top down perspective as well. Under the
Framework, the risks are then prioritized and business units use both preventive and mitigation controls to
manage risk exposures within prescribed tolerance limits.
2. STANDARDIZED PROCESS AND REVIEWS FOR EFFECTIVENESS
Within the Framework, a standardized 5-step process is applied across the Group to Identify, Evaluate, Prioritize,
Reduce and Review risks. The Framework incorporates and integrates various disciplines including safety
management, crisis management, business continuity management, disaster recovery and scenario planning.
Annually, strategic and top non-strategic risks are surfaced to the Board Safety & Risk Committee, which also
reviews specifi c top risks and the corresponding controls. The Framework includes a self-assessment element
whereby the effectiveness of the Framework is reviewed annually. Controls for risks are required to be tested/
simulated for effectiveness and such tests are independently verifi ed.
3. RISK MANAGEMENT ACTIVITIES UNDER THE FRAMEWORK
In the year under review, the Framework was enhanced by improving the Risk Matrix to allow better risk reporting/
prioritization and to align with international formats. The Annual Risk Review was carried out by business units
Group-wide to ensure that risks and controls are up-to-date. The key risks and corresponding controls were
reported and reviewed at various levels of risk committees. A review of the business continuity practices was
also carried out to ensure compliance with the newly published Singapore Standard on Business Continuity
Management. The Business Continuity Plans were tested/simulated for effectiveness and independently verifi ed.
Group-wide Crisis Management Scenario Exercises were also conducted to ensure planned responses are
adequate and effective.
4. 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 are not being satisfactorily managed.
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