BUILDING LANDMARKS, CHARTING GROWTH
161
Annual Report 2015
The five-step risk management process under
Perennial’s ERM framework consists of communication
and consultation, establishment of context, risk
identification and assessment, risk treatment as well as
monitoring and review. The assessment process takes
into account both the impact and likelihood of the risks
occurring, and encompasses the financial, operational
and reputational aspects of the risk impact. Tools such
as risk ratings, risk profile, key risk indicators and risk
registers are used as part of this process. Perennial’s
risk management process also extends downwards
to the level of the group’s assets, with the respective
management team in charge of each asset being
responsible for identifying, assessing, mitigating and
managing the risks within each of their functional areas.
Perennial’s risk profile, risk registers and all identified
risks and controls will be reviewed annually by the
Management and presented to the ARC and the Board.
The annual review ensures that Perennial’s risk profile
remains relevant to its business environment and
organisational structure.
Key risks are identified for closer monitoring by the
Management and at the asset level, through the
establishment of risk tolerance levels and key risk
indicators to measure and monitor the exposures for
such key risks. The ARC and the Board are also provided
with quarterly risk management updates via a risk
dashboard which showcases the status of key strategic
risks, risk exposures and risk management action plans,
any potential emerging risk or increase in risk exposures
as well as areas that require immediate attention or
pre-emptive actions.
The ERM framework and related risk management
policies would be reviewed and, where appropriate,
refined regularly by the Management, the ARC and
the Board, taking into account changes in Perennial’s
business and operating environment. Perennial shall
keep abreast of the latest developments and good
practices in risk management through participation in
seminars and interacting with field practitioners.
The diagram below outlines an overview of Perennial’s ERM framework and process:
COMMUNICATION
AND CONSULTATION
With appropriate
stakeholders at all
stages of the
risk management
process.
MONITORING
AND REVIEW
Periodic review of
risks and risk
management
mechanisms to
ensure that risks
are up-to-date
and control
mechanisms are
adequate
ESTABLISHING CONTEXT
Define external and internal environment
and parameters in managing risks
RISK IDENTIFICATION
Determine and describe the risk
RISK ANALYSIS
Understand the causes of risk, potential impact
and likelihood of risk occuring
RISK EVALUATION
Evaluate the risk against predetermined criteria
RISK TREATMENT
Identify action plans to mitigate risk
RISK ASSESSMENT
