FGV Annual Report 2016

ANNUAL INTEGRATED REPORT 2016 133 HOW WE ARE GOVERNED STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL BOARD AND BOARD COMMITTEES EXECUTIVE COMMITTEE & KEY SENIOR MANAGEMENT Group Internal Audit External Auditor Business Clusters Policies and Standard Operating Procedures Group RiskManagement Division Other Corporate Centres Group Governance First line of defence - Functions that own and manage risks Second line of defence - Functions that oversee risks Third line of defence - Internal functions that provide independent assurance Fourth line of defence - External Auditor HOWWE APPROACH RISK In an increasingly fast-paced and complex business environment, it is critical that we understand the link between risk and control. In FGV, this link is formalised through alignment of risk management processes, which supports fulfilment of our strategic priorities, thereby delivering value to all Stakeholders. OVERVIEWOF OUR APPROACH Our business is subject to constant changes that require us to regularly assess risks against our strategy. In our Group, risk management is an integrated discipline. We recognise the pivotal role it plays in balancing strategic planning with business execution and compliance. This facilitates informed decision-making and a conscious evaluation of opportunities and risks. The matrix for oversight, assurance, risk management and internal control is clearly set up in FGV. Our risk management oversight approach is premised on the four lines of defence model, coordinating various players involved and their activities to effectively monitor the enforcement of risk culture. RESPONSIBILITIES AND ACCOUNTABILITIES Our Board acknowledges its overall responsibility in overseeing the Group's risk management framework and internal control systems and is cognisant that the framework and control systems are designed to manage and reduce, rather than eliminate, the risks identified to an acceptable level of risk appetite. The Board Committees that support the Board in its risk management and internal control responsibilities, are as follows: (i) Board Governance & Risk Management Committee (BGRMC) is tasked to oversee risk management and governance aspects of the Group. The activities of the Board Governance & Risk Management Committee are summarised in the Report on the Board Governance & Risk Management Committee on pages 123-124 in this AIR; (ii) Audit Committee is tasked to assess the risks and control environments and oversee financial reporting, through the external and internal audit. The activities of the Audit Committee are summarised in the Report on the Audit Committee on pages 110-112 in this AIR; (iii) Investment Committee is tasked to ensure investments undertaken are aligned to the Group's vision and overall risk appetite. The activities of the Investment Committee are summarised in the Report on the Investment Committee on pages 120-121 in this AIR; and (iv) Nomination and Remuneration Committee is tasked to ensure that the Group's remuneration framework attracts and retains right talents with appropriate competencies to ensure organisation capability and human resource risks are managed. The activities of the Nomination and Remuneration Committee are summarised in the Report on the Nomination and Remuneration Committee on pages 118-119 in this AIR.