70 CapitaLand Integrated Commercial Trust Risk Management RISK GOVERNANCE The Manager’s Board of Directors (the Board) oversees risk governance and ensures that Manager’s management maintains robust risk management and internal control systems to safeguard the interests of CICT Group and its stakeholders. The Board, with support from the Audit and Risk Committee, approves CICT Group’s risk appetite (risk tolerance) that determines the nature and extent of material risks CICT Group is willing to take to achieve 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 to ensure effective risk governance and oversight. They are responsible for directing and monitoring the implementation of risk management practices throughout CICT Group, which includes tracking risk exposure using key risk indicators. Approve CICT’S risk appetite and review CICT’s risk profile Direct and monitor the implementation of risk management practices Board of Directors Audit and Risk Committee The Manager INTERNAL CONTROLS SYSTEM The Manager’s ERM Framework operates within a risk governance structure comprising three lines of defence to foster a strong culture of risk awareness. • Employees are accountable for effectively identifying and managing risks arising from their business activities. • A risk champion is appointed to drive this effort. • The Internal and External Audit teams evaluate the design and implementation of risk management and internal control systems to ensure their adequacy and effectiveness. This in turn, provides the Board with reasonable assurance. A Strong Culture of Risk Awareness • Nurturing a strong risk culture helps ensure effective and consistent implementation of risk management practices throughout the Group. • The first line of defence, comprising employees collaborates closely with the second line of defence to instil a culture of risk ownership and accountability. • In addition, the departments under the second line of defence regularly conduct workshops to enhance employees’ understanding of risk management and ensure the integration of risk management principles into decision-making and business processes. • The Manager’s management reinforces this culture by setting the tone at the top, leading by example, and effectively communicating our risk management strategy to employees. • The risk management and compliance departments provide oversight of risk management and compliance practices, fostering and embedding a culture of risk ownership and accountability.
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