FGV Annual Report 2018

REINFORCED OUR STANDARDS OF GOVERNANCE 01 02 05 03 07 06 04 08 09 85 ANNUAL INTEGRATED REPORT 2018 GOVERNANCE AT FGV: ACCOUNTABILITY BOARD GOVERNANCE & RISK MANAGEMENT COMMITTEE REPORT • In relation to risk management, to direct and oversee the formulation of the Group’s overall risk management framework and strategies, including policies, procedures, systems, capability and parameters to identify, assess and manage risks to ensure their relevance and appropriateness to the Group’s position and business, to advise and report to the Board, the overall risk appetite, tolerance and strategy on managing business risks, to report to the Board, key business risks and seeks its approval on the management of key business risks that are aligned to the Group’s risk appetite, to monitor the effectiveness and progress of management of key business risks and accordingly report to the Board the status of the key business risks, and to recommend to the Board, the approval of and/or amendments to the Group risk management framework and strategies, including policies, procedures, systems, capability and parameters, as relevant. • In relation to sustainability, to direct and oversee the formulation of the Group’s overall sustainability strategies and initiatives, including principles and policies which are aligned with related regulations, monitor the implementation of the Group’s approved overall sustainability strategies and initiatives, including principles and policies and review any Sustainability Report or Sustainability Statement or information having major financial and/or reputational impact to the Group, to be publicly issued by the Group or to be included in the Company’s Annual Integrated Report. For further details of the Board Governance & Risk Management Committee’s Terms of Reference are published on our website, www.fgvholdings.com SUMMARY OF WORK OF THE BOARD GOVERNANCE & RISK MANAGEMENT COMMITTEE Through the five meetings held, the Board Governance & Risk Management Committee undertook the following principal activities in discharging its responsibilities: Governance, Ethics and Integrity a. Reviewed and recommended the policies relating to corporate governance elements which are, among others, revised Credit Control Policy, Discretionary Authority Limits and Group Investment Policy, establishment of FGV Governance of Policies and Procedures and Legal Authority Limit and Signing Protocol. These policies are crucial in developing a strong culture of corporate governance that allows Management to maintain an effective governance structure to ensure appropriate management of risk and level of internal controls. b. Received updates on the status of compliance of Board governance and Whistleblowing Report in line with Bursa Securities Listing Requirements on the Group’s corporate governance disclosure and the principles of MCCG 2017. This reflects the healthiness of governance in the Group and to gauge the effectiveness of the Group’s Whistleblowing Policy and Procedures. Risk Management a. Assessed and deliberated on the Group’s risk status through the FGV Group Quarterly Risk Report covering the Group’s top 10 risks, Risk Appetite Statement (RAS), key risk beyond the risk register, project, emerging and reputational risks. This ensures the Board is always informed of the Group’s risk universe, significant risks that require closer attention and prevailing risk profile and outlook. b. Approved the enhanced project risk assessment template to facilitate risk assessment on investment proposals which imbeds appropriate risk management process as part of decision making for major projects, investments and mergers and acquisitions. c. Evaluated and approved the implementation of RAS for Upstream Cluster and inclusion of five new additional key risk drivers to the Group RAS. d. Informed and advised of the outcomes of the Scenario Analysis exercise based on prolonged decline in the CPO price, severe adverse weather and economic crisis scenarios. The key takeaway was to prepare FGV with a better understanding on the underlying risk drivers and prepare for the formulation of appropriate and effective mitigation strategies.