Identifying and Mitigating Risks to Ensure Growth and Sustainability
ICTSI and its subsidiaries’ geographically diverse operations expose the ICTSI Group to various business risks, particularly competition, commercial, economic, political and foreign exchange risks, which movements may materially impact the financial results of the ICTSI Group.
ICTSI established the Enterprise Risk Management System to be readily responsive to the dynamic business environment in which it operates. The ERM System will help identify and manage the ICTSI Group’s Key Business Risks in support of ICTSI’s Vision and Mission to achieve its overall strategy and business objectives. ?Effective August 2018, ICTSI’s ERM methodology is following the Committee of Sponsoring Organizations of the Treadway Commission’s 2017 ERM Framework: ?Enterprise Risk Management – Integrating with Strategy and Performance.
Risk Management Oversight
The ICTSI Board of Directors is committed to establishing an organization that ensures risk management is an integral part of all its activities and a core capability. The executive management of ICTSI fully supports the implementation of ERM Policy approved by the Board and is responsible for the development of ERM processes and the implementation of risk reduction strategies.
ICTSI established the ERM Committee?consisting of the Chief Risk Officer, who is also the Committee Chairman, and members of the Senior Management; and provided for the responsibilities of the ERMC. In addition, there is the Board Risk Oversight Committee, which?primarily oversees the overall risk management activities of ICTSI.
The ERM Process
ICTSI is performing the ERM Process by following these key steps:
- Establish risk management context, goals and objectives and risk oversight structure;
- Assess business risks;
- Develop risk treatment strategies;
- Develop and implement risk management action plans;
- Monitor and report on the ERM Process; and
- Continuously improve the ERM Process Semi-annually, the Corporate Functions, Business Development/Regional Offices and Business Units performs risk assessment based on the key risks as identified in ICTSI’s risk profile applicable to each of the respective business functions and areas.
The ERM Process is quarterly reviewed by the ERM Committee and Board Risk Oversight Committee. The importance of managing key business risks has significantly increased considering the heightened volatility in both the Philippine and international financial markets.?
Key Business Risks
ICTSI and its subsidiaries’ geographically diverse operations expose the ICTSI Group to various market risks, particularly foreign exchange risk, interest rate risk and liquidity risk, which movements may materially impact the financial results of the ICTSI Group.
The importance of managing these risks has significantly increased in light of the heightened volatility in both the Philippine and international financial markets. With a view to managing these risks, the ICTSI Group has incorporated a financial risk management function in its organization, particularly in the Treasury operations.