Risk Management
Risk Management Policy
On December 15, 2020, Chia Hsin Cement Group first formulated a risk management policy. In order to continuously improve and establish a comprehensive risk management system, the policy was revised in 2023 with reference to the “Risk Management Best Practice Principles for TWSE/GTSM Listed Companies.” On December 12, 2024, the Board of Directors (BOD) approved the establishment of a Risk Management Committee to oversee risk management-related operational mechanisms, further enhancing the functionality of risk management. For detailed information, please refer to the “Risk Management Policy and Procedures”.
Risk Management Framework
- The BOD serves as the highest governing body for risk management. It approves risk management policies and related regulations, oversees the overall implementation of risk management, and maintains effective risk control.
- The Risk Management Committee assists the BOD in carrying out its risk management duties and supervises the risk management taskforce conducting comprehensive assessments of the company’s strategies, operations, legal compliance, finance, and other risks (including environmental, energy, and emerging risks , among others.) In response, the risk management taskforce reports the risk management operations to the Risk Management Committee and the BOD at least once a year.
- The risk management taskforce is responsible for planning, implementing, and overseeing risk management-related matters. Its members are equipped with diverse professions from different departments, including macroeconomics, strategic management, investment, risk management, internal audit, human resources, finance, legal affairs, and sustainable development. This composition ensures various perspectives contribute to more comprehensive opinions during discussions and execution.
- Each operating unit (including subsidiaries):
- Responsible for risk identification, analysis, assessment, and response.
- Regularly report risk management information to the risk management taskforce.
- Maintain the implementation of risk management effectiveness and related control procedures in accordance with the risk management policy.
- The Auditing Office is an independent organization in the company affiliated with the BOD. Annually, it reviews whether the risk management taskforce enforces the identification, analysis, assessment, and response to various risk items consistent with risk management policy and procedure. During the execution of the annual audit plan, it also verifies the effectiveness of risk management activities to assist in properly managing significant operational risks
Risk Management Procedures
Risk Management Operation Status
- The update report on the management results of significant risk events in 2024 was submitted to the Audit Committee on August 1, 2024.
- The interim progress report of the risk management project for 2024 and preliminary draft of the Risk Assessment Report for 2025 were presented to the Audit Committee on November 7, 2024.
- The Risk Assessment Report for 2025 was reported to the Audit Committee and the BOD on December 12, 2024.
Risk Trainings in 2024
| Course Content | Hours | Target participants |
| How Directors Can Oversee and Promote Risk Management Systems (Digital Technology & Privacy Protection Trends) | 3 hours | All the board members, department heads, and designated colleagues |
| New Forms of Cross-Border Cybersecurity Threats, Governance Trends, and Protection Strategies | 3 hours | All the board members, department heads, and designated colleagues |
| Artificial Intelligence (AI) Driving Industry Transformation and Business Innovation | 3 hours | All the board members, department heads, and designated colleagues |
| The Meaning and Practical Implementation of Risk Management (#) | 2 hours | The risk management taskforce |
| Optimization of Risk Management Methodology and Establishment of an Operational Process Risk Inventory (#) | 9 hours | The risk management taskforce |
| Risk Assessment Interviews and Discussion Meetings (#) | 18 hours | Head of each business unit (BU), department heads, designated personnel, and the risk management taskforce |
| Review of Risk Management Fundamentals | Handouts & Questions | Head of each business unit (BU), department heads, designated personnel |
- (Note) In order to establish effective risk awareness and risk culture, external consultants were commissioned for the first time in 2024 to conduct 6 risk assessment workshops. During the workshops, colleagues actively discussed the content of the questionnaire, achieving consensus, confirming any oversight, and conducting risk assessments.
Important Risks and *Emerging Risks
| Risk Description | Impact | Effectiveness | Possibility | Solution |
| Building durability, safety, and legality | Revenue reduction / Employee safety / Capital expenditure | Medium | Medium | ● Regularly review and assess the safety and legality of the building, and plan and execute relevant maintenance and repair projects ● Phased planning and updating of important equipment and systems in the building ● Introduce green building certification and conduct targeted marketing for the identified customer segments |
| *Policy changes towards achieving net-zero carbon emissions by 2050 | Revenue reduction / Increased operational costs/ Corporate reputation | Medium | Medium | ● Actively seek new business opportunities and development directions ● Negotiate contract modifications with the Taiwan international ports corporation timely based on market demands and development trends ● Track and understand government policies and regulations, and duly propose responsive measures ● Implement a carbon reduction plan with the goal of obtaining SBTi certification |
| Extreme climate | Property losses/ Employee safety/Impact on operations | Medium | Medium | ● Establish comprehensive plans for ongoing operations, crisis management, and response plan, also conduct regular reviews ● Periodically assess and enhance the resilience of infrastructure ● Increase or ensure that insurance coverage meets the requirements |
| *Labor shortages due to issues such as declining birth rates and regional factors | Impact on operations | Medium | High | ● Enhance employer brand image, adopt a diverse hiring policy, and create an inclusive and equal workplace environment ● Continuously follow industry and workforce development trends, collect market salary data and regularly adjust recruitment and training plans ●Consider industry-standard salary rates and benefits conditions to regularly review and optimize the salary and compensation system ● Offer professional training and development plans for employees ● Conduct regular interviews with employees through various channels to gather feedback ● Continuously optimize operational processes to improve working efficiency ● Expand industry-academia collaboration to strengthen talent reserves |
| Business continuity risks triggered by external factors such as diasters, accidents, or infectious diseases | Equipment losses/ Revenue reduction / Impact on reputation | High | Medium | ● Establish comprehensive plans for ongoing operations, crisis management, and response, and conduct regular reviews ● Build a diversified supply chain ● Regularly organize training courses and exercises to enhance employee response capabilities ● Establish effective internal and external communication mechanisms to ensure accurate and timely dissemination of emergency messages and response measures |
| Increase in operational costs due to inflation or other external factors | Increased operational costs | Low | High | ● Regularly review costs and expenses, conduct cost-benefit analyses, and implement appropriate response measures ● Develop a systematic supplier management mechanism to build a robust supply chain system ● Introduce energy-saving equipment to improve energy efficiency and reduce energy expenditures effectively, enhance service value through equipment optimization while implementing reasonable cost structure adjustments |
| Strategic new market expansion risk | Property losses/ Impact on reputation | High | Medium | ●Conduct feasibility assessments ● Establish a project team to ensure timely achievement of all work milestones ● Implement brand value and differentiation strategies |
