Chemical Company of Malaysia Berhad Sustainability Report 2019

The roles and responsibilities of the SSC and SWC committees 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 in involved in the decision-making process for all CCM’s sustainability-related matters; and • To report the progress of sustainability matters to the Board on a periodical basis. Sustainability Working 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 situation where they are representing CCM. HOW WE MANAGE OUR RISKS [102-11, 102-30, 102-20] Effective risk management is an essential part of CCM’s model. It enables us to pursue opportunities within the risks and minimise the potential impact in the event that risks are crystallised. Effective risk management also protects the Group’s reputation whilst ensuring profitability and sustainability. It is strongly embedded into the Group’s strategy and underpinned by robust internal controls, a structured framework and an effective process. The Group’s ongoing group-wide risk management process involves identifying, evaluating and managing the significant risks that we face to minimise risk incidents and maximise business outcomes. All new and major investments have to observe a process approval that includes an assessment of the associated risks. We have adopted a Risk Management Manual and Guidelines, which are based on the ISO 31000 international guideline for managing risk. This helps ensure that the risk management process is consistent across CCM. The line functions within CCM (including the monitoring and assurance functions) provide the necessary support to the Board in ensuring the effectiveness of the Group’s risk management framework. In managing its risk, the Group brings three Lines of Defence (LOD) into play. 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. The first line of defence involves the Management from all businesses or major departments. 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 manage these risks at an acceptable level. The risk profiles and risk treatment measures identified by this process are documented in risk registers with each business or operations area having its respective risk register. The overall process is facilitated by the Group Risk Management Unit, which is the second line of defence for the Group. | Upholding Good Corporate Governance | 30 CHEMICAL COMPANY OF MALAYSIA BERHAD