The Aboitiz Construction’s Risk Management Policy provides a comprehensive framework for identifying, assessing, and managing risks in the company. It aligns with the International Standard ISO 31000 and is designed to protect the company’s reputation and core investments while creating long-term value for stakeholders.
Introduction
The policy outlines the purpose, scope, and philosophy of risk management at Aboitiz Construction. It aims to formalize risk management activities, clarify roles and responsibilities, and communicate the status of risks faced by the organization. The company emphasizes a culture where every team member contributes to risk management.
Governance
The governance structure includes:
- Board of Directors: Overall responsibility for risk management.
- Executive Committee: Oversight of the risk management program.
- Risk Management Team: Develops and implements the Enterprise Risk Management (ERM) strategy.
Aboitiz Construction has established a quantified risk tolerance guideline of 30% of Net Income After Tax (NIAT), ensuring informed risk-taking aligned with potential rewards.
Risk Framework
The Risk Management Framework is organized into four pillars: Governance, Process and Integration, Risk Finance, and Capability Building. Consists of components for designing, implementing, monitoring, and improving risk management.
Process
The policy adopts a structured process based on ISO 31000, which includes:
- Establishing Context: Defining internal and external parameters for risk management.
- Risk Assessment: Identifying, analyzing, and evaluating risks.
- Risk Treatment: Selecting options to modify risks.
- Monitoring and Review: Continuously monitoring risks and treatment effectiveness.
- Communication and Consultation: Engaging stakeholders throughout the process.
Risk Classification
Aboitiz Construction’s Risks are classified into categories such as strategic, Departmental/Operational, Project, financial, legal/compliance, and reputational. This classification helps in identifying responsible parties for managing similar risks.
Business Continuity Management (BCM)
The BCM outlines policies for maintaining operations during disruptions. It includes business impact analysis, continuity planning, testing, training, and communication strategies.
Risk Finance
Risk Finance focuses on achieving an optimal balance between retaining and transferring risks through insurance and other financial instruments.
Capability Building
The company emphasizes developing a risk management culture through training and communication initiatives to enhance understanding of risk management principles among employees.
Policy Administration
The policy sets out guidelines for administration, monitoring compliance with international standards, and maintaining effective communication regarding risk management practices.
The Risk Management Policy establishes a robust framework that integrates risk management into all aspects of its operations, ensuring proactive identification and treatment of risks while fostering a culture of accountability among its employees.