Singapore Airlines 2016 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) Actual Implementation of Coordinated
Response Plans
In July 2015, the coordinated response plan to
manage mass flight disruptions was activated
when there was an Indonesian volcanic eruption
disrupting flights to Bali and a typhoon aecting
flights to Shanghai. As a result of the simultaneous
occurrence of two natural disasters in two separate
sub-regions, multiple functional units assembled
together and executed a coordinated response
to handle and recover disrupted flights, while
providing care for aected passengers.
(b) Simulation of Risk Responses
The crisis management response plans of
subsidiaries were simulated and tested for
eectiveness. Coordination in procedures and
communication with external stakeholders, such as
airport authorities, were also demonstrated in the
exercise. Responses to cyber-related scenarios were
validated in the year, and such drills will continue to
be conducted regularly.
(c) Establishment of a Compliance Management Unit
In the year, a Compliance Management unit was
set up to look into establishing a compliance
management framework for the Group. This unit
aims to ensure that SIA continues to be diligent in
maintaining a culture of propriety and integrity,
through monitoring and reviewing the adequacy
and eectiveness of compliance eorts. The initial
area of focus will be on anti-bribery, competition,
and data privacy laws.
(d) Risk Review Activities
The Group carried out the risk management review
exercises on a half-yearly basis, including a review of
strategic risks. Risks that impact the performance and
objectives of the strategic investments undertaken by
the Company were also evaluated by the Investment
Review Committee. An impact study on airport closure
was also conducted in the year. The Audit Committee
and the Board carried out a review of cyber risk
exposures, and the Group’s responses to these.
(e) On-going Risk Committee Activities
The Board Safety & Risk Committee (BSRC) reviewed
top risks and corresponding controls as part of the
on-going activities, including reports on the simulation
of business continuity plans. The BSRC also ensured
that strategic and other risks surfaced were distributed
to the other Board Committees and the full SIA
Board for oversight. The SIA Group Risk Management
Committee supported the BSRC in ensuring that
risks were surfaced and reviewed, and risk responses
across the Group were coordinated and integrated.
Correspondingly, company risk management
committees also ensured that risks were surfaced by
the various divisions for the BSRC’s review.
(f) Written Assurances on Risk Management
Processes
As part of risk governance and assurance, Business
Unit Heads provided written assurances on the
identification and management of risks to the
Company. Corresponding written assurances were
also provided by CEO and Senior Vice President,
Finance to the BSRC.
3. Board Of Directors’ Comment 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
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