RISK GOVERNANCE The Manager’s Board of Directors (the Board) is responsible for the governance of risk, and ensures that the Manager’s management maintains a sound system of risk management and internal controls, to safeguard the interests of CICT Group and its stakeholders. Under our risk management approach, the Board, assisted by the Audit and Risk Committee, approves CICT Group’s risk appetite (risk tolerance) which determines the nature and extent of material risks CICT Group is willing to take to achieve its strategic objectives. The Board also regularly reviews CICT Group’s risk profile, material risks and mitigation strategies, and ensures the adequacy and effectiveness of the risk management framework and policies. The Manager’s management team supports the Board and Audit and Risk Committee in terms of risk governance and oversight. In doing so, the Manager’s management teamdirects andmonitors the implementation and practice of risk management across CICT Group, including the monitoring of risk exposure through key risk indicators. INTERNAL CONTROLS SYSTEM The Manager’s ERM Framework operates within a risk governance structure based on three lines of defence which sets out clear accountability across all functions in CICT Group: Employees play an important role as the first line of defence and are accountable for the effective identification and management of risks that arise from their business activities. The risk management and compliance departments, as part of the second line of defence, provide oversight over risk management and compliance practices, promote and embed a culture of risk ownership and accountability. Internal and External Audit, as the third line of defence, review the adequacy andeffectiveness of risk management and internal control systems design and implementation so as to provide reasonable assurance to the Board. A STRONG CULTURE OF RISK AWARENESS The fostering of a strong risk culture helps ensure risk management practices are implemented effectively and consistently across CICT Group. The first line of defence, comprising employees, work closely with the second line of defence to ensure risk awareness and accountability are ingrained in our culture. In addition, risk workshops are conducted regularly by the second line of defence departments, to enhance the risk management knowledge of our employees and ensure risk management principles are embedded in all decision-making and business processes. The Manager’s management further reinforces the culture by setting the right ‘tone at the top’, leading by example, and communicating our risk management strategy. 128 CAPITALAND INTEGRATED COMMERCIAL TRUST RISK MANAGEMENT
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