Risk Management is institutionalized for the Corporation to promote good corporate governance and fulfill its long-term success by addressing risks that could affect corporate responsibility. PSC manages the economic, environmental, and social risks by establishing risk management processes and frameworks to effectively handle such risks to improve overall organizational performance.
The top risks in the retail industry to which PSC belongs include increased competition, brand reputation, and business operations/supply chain continuity. Meanwhile, the main risks arising from the Corporation’s financial instruments are credit risk, liquidity risk, and interest rate risk.
The Audit and Risk Committee ensures the integrity of internal control activities, develops, oversees, checks, and preapproves financial management functions and systems in the areas of credit, market, liquidity, operational, legal and other risks, and crisis management. The Internal Audit Division and the External Auditor directly report to the Audit and Risk Committee regarding the direction, scope, and coordination of audit and any related activities.
The PSC Board of Directors or Executive Committee, via the Audit and Risk Committee, oversees the establishment and implementation of the risk management system and annually reviews the effectiveness of the system. In particular, the Audit Committee considers on a regular basis whether:
- PSC’s ongoing risk management program identifies all material and critical areas of risk;
- Adequate risk mitigation strategies have been designed and implemented by PSC to manage all
- material and critical identified risks;
- PSC undertakes a regular program of audits (Internal Audit, Compliance Audit, and External Audit) to test the effectiveness of internal controls and compliance with PSC’s prescribed policies; and
- Timely remedial action is undertaken to redress areas of weakness.
The Audit and Risk Committee also reviews and approves PSC’s risk management policy.