Corporate Governance

Risk & Crisis Management

Issue Date:2021/06/16

Risk Management Committee

For a robust operation of Chunghwa Telecom, CHT Board of Directors/Audit Committee are the highest decision-making bodies for risk management at CHT, in charge of the review, supervision, and audit of the corporate risk management policies and mechanisms.

The “Risk Management Committee” was officially established at CHT with the President as the chairperson in 2016. The Risk Management Committee convenes at least once a year and reports the implementation to the Board of Directors/Audit Committee.

 

The Board of Directors stipulated the risk management policies, framework, and culture at CHT. The Secretariat assists in promotion of company-wise risk management activities. Then, the Audit Department reviews the risks and reports to the Board of Directors. In 2020, the ESG risks (climate risks included) were incorporated into the overall corporate risk management process.

We attach special importance to management of corporate operational risks. “Regulations Governing the Risk Management” has been formulated as the basis for all personnel’s reference in conducting business. The CHT Chief Audit Executive carries out annual audits for risks at “the corporate level” and “the operational level” based on the annual auditing plan besides management of major risks. The audit results will be submitted to the Board to facilitate the examination and review of internal control errors by the Board and managers as well as evaluation of the managerial results and efficiency of various operational risks.

Practice of Corporate Risk Culture

An Enterprise Risk Management (ERM) System is in place at CHT to manage various business risks. Meanwhile, risk management is tied with the performance appraisal of the executives to practice the culture of risk management.

Aspect Description
 
Organization
  • “Risk Management Committee” established in 2016, which reports to the Board at least once a year
 
Policy
  • Risk policies and framework stipulated by the Board of Directors
  • “Regulations Governing the Risk Management” as the basis for all personnel’s reference in conducting business
 
Management System
  • Enterprise Risk Management (ERM) System to manage business risks regularly
 
Assessment Tools
  • “Risk Assessment Matrix” as an assessment tool for assessments of regulatory risks, network maintenance risks, market competition risks, climate change risks, risks with financial operation, etc.
  • Enhanced sensitivity analyses and stress tests for focused operational items and key ESG issues (risks of climate change included)
  • Analysis of the scope of operation, upstream and downstream, and the short-, mid-, and long-term climate risks and opportunities across the whole lifecycle of assets in line with the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)
 
Appraisal
  • Risk Management Committee to promote implementation of risk management efforts in the Company and evaluate performances in risk management
  • Audit Department to review the risks and report to the Board of Directors
 
Feedback and Improvement
  • Monthly tracking of risk profiles and updates to the Risk Management Committee and CC to the Audit Committee
  • The Committee to improve the existing risk management mechanisms and ensure the processes aligned with the operational needs on the basis of feedbacks from various units
 
Implementation Results in 2021
  • 3 committee meetings convened with focuses on the corporate-level risks tied with the objectives in the BP and deliberations on directions of material risk issues
  • “2021 Risk Management Promotion” report on the Board of Directors meeting in May

For more information on CHT risk management mechanisms, please check: Risk Management