The Board is responsible for evaluating and determining the nature and extent of the risks it is willing to take to achieve the Company’s strategic objectives and for ensuring that the Company establishes and maintains appropriate and effective risk management and internal control systems.
Risk Governance Framework
Under our risk management framework, the Board and management are responsible for identifying and analysing the risks underlying the achievement of business objectives and for determining how such risks should be managed and mitigated.
As summarised in the following diagram, the Board oversees management of the design, implementation and monitoring of risk management and internal control systems. Management provides confirmation to the Board, through its Audit Committee, on the effectiveness of these systems.
The management of risks is subject to audit by GIAD with support from specialist external consultants, where necessary.
Continuously Reviewing our ERM System
Our Enterprise Risk Management (“ERM”) System helps us identify, analyse and manage business risks. Risk identification, analysis and management processes are completed on a regular basis throughout the year and the results help to guide our business decisions.
Our Corporate Risk Register (“CRR”) incorporates SD-related risks, such as climate-related risks. We have also integrated SD factors into our corporate risk analysis.
In 2021, we continued to partner with a risk management consultant to enhance our risk scoring model using a rating scale and risk dimensions that are easier to interpret and assess. This enhancement also facilitates benchmarking across the Swire Group through the alignment of risk scores. We continued to conduct regular review of risks and mitigation strategies and consulted with external risk advisors to share risk-related experiences and industry best practices.
The following table provides an overview of our risk profile, including what we consider to be Swire Properties’ principal existing and emerging risks, possible associated impacts, and mitigation measures that are in place or under development. Many of these mitigation measures refer to activities discussed in more detail elsewhere in this report.
Existing Risks and Possible Impacts
Severe disruption to the business caused by acts of man or acts of nature may have adverse financial effects on the Company.
Changes in the global and local political landscape and priorities may have significant impact on the business environment.
The lack of compelling development projects and business disruption may lead to a slowdown in business and so affect financial performance.
Brand and Image
The failure to maintain brand position and perception may make us less competitive.
Delay in the completion of developments may have an adverse financial effect by delaying the timing of property sales and leasing.
Emerging Risks and Possible Impacts
Extreme weather conditions and climate change may increase the risks of physical damage to properties and adversely affect their valuation.