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EC World Real Estate Investment Trust ANNUAL REPORT 2016
Enterprise Risk
Management
Risk management is an integral part of the business
of ECW and its subsidiaries (collectively, the “ECW
Group”) at both the strategic and operational levels. A
proactive approach towards risk management supports
the attainment of ECW Group’s business objective and
strategy, thereby creating and preserving value for
Unitholders.
The Manager recognises that risk management is just
as much about opportunities as it is about threats. To
capitalise on opportunities, the Manager has to take
measured risks. Therefore, risk management is not
about pursuing risk minimisation as a goal, but rather
optimising the risk-reward relationship within known
and agreed risk appetite levels. The Manager therefore
takes risks in a prudent manner for justifiable business
reasons.
The Board is responsible for the governance of risk across
ECW Group. The responsibilities include determining
ECW Group’s risk appetite, overseeing the Manager’s
Enterprise Risk Management (“ERM”) Framework,
regularly reviewing ECW Group’s risk profile, material risks
and mitigation strategies, and ensuring the effectiveness
of risk management policies and procedures. For these
purposes, it is assisted by the ARC which provides
oversight of risk management.
ECW Group’s RAS is expressed via formal, high-level
and overarching statements. Having considered key
stakeholders’ interests, ECW Group’s RAS sets out explicit,
forward-looking views of ECW Group’s desired risk profile
and is aligned to ECW Group’s strategy and business
plans. The Manager incorporates accompanying risk limits
which determine specific risk boundaries established at
an operational level.
Risk Monitoring
&
Reporting
Risk
Response
Risk-Aware Culture
Board Oversight
&
Senior Management Involvement
Risk Strategy
Risk Identification
&
Assessment
• Key Risk Indicators
• Quarterly Compliance
Checklist
• Risk Appetite
• Risk
&
Control
Self-Assessment
• Investment Risk Evaluation
• Scenario Analysis
• Whistle-blowing/
Business Malpractice
• Accept
• Avoid
• Mitigate
• Transfer
Internal Control System
Independent Review
&
Audit
ERM Framework