GOVERNANCE → Corporate Governance Report The RSC is supported on risk related matters by the Risk and Assurance (R&A) function which in turn works with Chief Risk Officers (CROs) of the respective businesses and management team. The R&A function is key to making sure that ST Engineering manages its risks well, complies with legal and regulatory requirements where it operates and has the right governance and controls in place. Specifically, the R&A function is to: • work with Management to strengthen in-line controls and governance, risk management and compliance (GRC) culture; • provide assurance to Management that the Group is conducting its business in compliance with all relevant and material regulations, customer requirements and internal procedures; and • ensure the continued effectiveness of GRC frameworks, policies and procedures in Singapore and overseas business units. Group Head, R&A reports to Group CFO. The R&A function provides leadership in the implementation of a Group-wide Enterprise Risk Management (ERM) framework that allows risks to be identified, assessed, monitored and managed by the business managers. Enterprise Risk Management (ERM) Framework The Group has put in place an ERM framework to identify, assess, monitor and manage key business risks in the short, medium and long term. The ERM framework sets out a common and consistent understanding of risks and risk tolerance limits across the Group. The framework allows the Board and Management to have a shared understanding of the risk philosophy and overall risk appetites as they establish business strategies and objectives. The annual risk work plan is approved by the RSC. There is at least a member on the RSC who is also a member of the AC to facilitate communication and access of information between the two Board Committees. During the year, the Board formalised the Group Risk Appetite Framework and Risk Appetite Statements to promote broader risk awareness and reinforce the desired risk culture across the Group. Additionally, the R&A function has embarked on a review of the Control Self-Assessment Framework, aimed at fostering an integrated risk-based control environment and enhancing the basis of assurance from Management. This is expected to be progressively implemented for Singapore businesses in 2022, and for overseas business units in subsequent years. a) Risk Appetite Framework The Risk Appetite Framework defines the risk boundaries in line with our corporate strategy for compliance within the Group. Under this framework, the Board has approved the following Group Risk Appetite Statements with respect to our key risks in line with the Group’s material ESG factors. They serve as a key conduit for aligning the Group’s risk profile with the Group’s corporate strategy and business models. Strategic We are committed to pursuing sustainable and inclusive growth to enhance our competitive advantage whilst upholding our core values. ESG We subscribe to ESG best practices to benefit all stakeholders. Financial • We aim to maintain a resilient balance sheet. • We have a defined governance framework to evaluate and approve all investment and business transactions. Regulatory Compliance • We comply with all applicable laws and regulations in the countries where we operate in. • We adopt a zero tolerance policy towards fraud, bribery and corruption. Operational • We are committed to “Safety Before Profits”. • We aim to achieve zero accidents at the workplace. IT and Cyber We are committed to protecting our data and systems including those entrusted to us by adopting best practices in cybersecurity. The RSC provides oversight to the Group in formulating and reviewing risk policies and risk tolerance limits. These policies and limits are subject to periodic reviews to ensure that they continue to support the Group in achieving its strategic objectives and are aligned with the Group Risk Appetite Framework. b) Risk Aware Culture and Training Embedding the right culture throughout the organisation is important for effective risk management. The RSC recognises that good culture fosters openness that will enable management and staff to escalate concerns in a timely manner without fear. This will also promote better judgment and greater assurance to the Board and Management. 111 CORPORATE OVERVIEW PERFORMANCE REVIEW SUSTAINABILITY FINANCIAL REPORT 70 ST ENGINEERING SUSTAINABILITY REPORT 2021 OVERVIEW OUR SUSTAINABILITY APPROACH ENVIRONMENTAL SOCIAL GOVERNANCE AWARDS INDEX
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