Chemical Company of Malaysia Berhad Sustainability Report 2018

Upholding Good Corporate Governance For each of the SSC and SWC committees, their roles and responsibilities are as follows: Sustainability Steering Committee (SSC) • To appoint the members of the Sustainability Working Committee (SWC); • To oversee and monitor the progress of integrated sustainability activities across CCM by the SWC; • To ensure key members are involved in the decision-making process for all of CCM’s sustainability-related matters; and • To report the progress of sustainability matters to the Board on a periodical basis. SustainabilityWorking Committee (SWC) • To directly monitor the sustainability performance of the Group at all levels; • To coordinate and execute sustainability activities that are in line with the strategic direction of the Group and its policies; and • To ensure sustainability matters are effectively communicated to all stakeholders i.e. the SSC, the Board, CCM employees, vendors, customers and others. All employees are responsible for maintaining the highest standards of honesty, integrity and trustworthiness in day-to-day operations and in any situations where they are representing CCM. HOWWE MANAGE OUR RISKS [102-11, 102-20, 102-30] The CCM Group has established a Risk Management Manual and Guidelines, which is based on the ISO 31000 standard, to ensure consistent practice of managing risks across the Group. In managing risk, the Group’s three Lines of Defence (LOD) are as follows. LOD Responsibilities First line The departments and businesses that own and manage the risk Second line The Group Risk Management Unit Third line The Group Assurance Unit, that provides independent assurance on the effectiveness of the risk management processes across the Group. Risk owners (who are the first line of defence in risk management) define, highlight, report on and manage a variety of risks, including business and operational risks anticipated by them. They conduct risk assessments to identify the risks relating to their areas of supervision and control; analyse the likelihood of these risks occurring and the consequences if they do occur; evaluate the risk level by comparing against the approved risk criteria; as well as determine the actions being and/or to be taken to mitigate these risks to an acceptable level. The risk profiles and risk treatment measures determined from this process are documented in risk registers. Controls are put in place to ensure that the Group’s objectives are achieved through adequate mitigation of the identified risks. The overall process is facilitated by the Group Risk Management Unit which is dedicated to this role. The Group has an Executive Risk Management Committee which is chaired by the Group Managing Director and comprises Senior Management of the Group, to provide oversight and add impetus to the risk management process. The risk management process and the significant risks are tabled to the Board Risk Management Committee for their review on a quarterly basis. The top risks for the Group are: 1. Compliance risk – changes in requirements by regulators; 2. Competition risk – increasing number of new entrants; and 3. Key man risk – loss of key personnel in the Group. The action plans are: Risk Action Plans Compliance • Undertake internal review on compliance with regulatory criteria • Ensure constant monitoring of and adherence to work processes Competition • Improve customer relationship management • Improve product quality and delivery • Actively conduct sales activities Key man • Establish Talent Management programme • Ensure Succession Planning is in place 27 CHEMICAL COMPANY OF MALAYSIA BERHAD