Risk and Business Continuity Management
The uncertainty and volatility caused by external factors, whether economic, social, or environmental, are becoming more intense and constantly changing. As a result, the Company prioritizes risk and business continuity management to support operations and enable the achievement of its objectives, strategy, and goals. This has also increased its flexibility, allowing the Company to quickly adapt and respond to changes without affecting its main operations or goals, both under normal conditions and in the event of unexpected occurrences in the short and long term. The Company is able to respond appropriately to stakeholders’ needs while mitigating the impact of the Company’s operations on the environment and stakeholders in the value chain.
Risk Management Plan and Policy
The Company has adopted risk management principles based on COSO-ERM 2017 (The Committee of Sponsoring Organizations of the Treadway Commission: Enterprise Risk Management),integrating strategy and performance for sustainable risk management, ensuring that enterprise risk management is efficient and aligned with international standards. The Company conducted a study on COSO-ERM 2017: Guidelines for Applying Enterprise Risk Management (ERM) to Environmental, Social, and Governance (ESG) – Related Risks, to gain a comprehensive understanding and effectively identify ESG risks, integrating them with strategies and business management. The Company has also established a risk management policy, along with a business continuity management policy, to ensure that appropriate risk management and effective control systems are implemented throughout the organization, enabling the Company to achieve its strategic objectives and various key goals.
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Risk Management Structure
Enterprise Risk Management Structure
The enterprise risk management is under the supervision of the Board of Directors and has been assigned to the Audit Committee and the Executive Committee to jointly oversee risk management and the effectiveness of risk management. The Executive Committee is responsible for setting the risk management framework and policy which includes developing a risk management plan to supervise risk management to be consistent with the Company’s strategies and goals as well as provide recommendations to the Management to ensure that risks are appropriately managed and maintained within the Company’s risk appetite.
Risk Management Processes and Tools
The Company established an integrated risk management system for the entire organization, aligning with strategy or business goals and international standards. The Company defines risk appetite, utilizes key risk indicators (KRI) for each risk factor, and regularly monitors the mitigation plan to ensure that risk levels remain within risk appetite.
The Company prepared an enterprise risk management manual to provide guidelines for risk management according to the COSO Enterprise Risk Management 2017 standard, which is an internationally accepted standard, and determined the risk management process as follows:
Business Continuity Management
To ensure business continuity amidst uncertainty and unforeseen events, the Company has prepared a Crisis Management and Response for Business Continuity and Contingency Plan, which is part of the Business Continuity Management (BCM). This operating procedure is designed to assess risks and the severity of potential impacts for each event, as well as outline a mitigation plan to manage adverse situations, including natural disasters, fires, floods, and supply chain risks such as events that delay the delivery of goods, both domestically and internationally, as well as raw material shortages. It also addresses cyber threats, staff shortages due to epidemics of contagious diseases, and other potential emergencies.
The goal is to be prepared for any emergencies that may occur in any form to ensure business continuity, mitigate risks to the supply chain, and minimize operational losses. This includes food safety, protecting consumer interests, and maintaining strong customer relationships, company assets, brand image, and trademarks, ensuring that all departments operate efficiently, consistently, and in the same direction.
The Crisis Management and Response for Business Continuity and Contingency Plan has been established, with the Chief Executive Officer (CEO) appointed as Crisis Director. Executives from relevant departments have been designated to join the working team to execute crisis management and business continuity. In addition, the Company has established crisis recovery guidelines and conducts annual emergency drills. Some of these drills may need to involve customers in the event of an emergency impacting raw materials, products, and other factors affecting customers, suppliers, stakeholders, the environment, and the relevant community.
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KCG Sustainability Report 2024
Sustainability Performance Data 2024 – Governance and Economic Performance