Enhancing Enterprise Risk Management in 2014
Our framework for Enterprise Risk Management (ERM) provides a simple and effective management process to aid business units across the organisation to identify and review risks and prioritise resources to manage risks that arise. It provides our managers with a clear view of the significant risks facing the Company and is used to support decision making and project execution, helping to deliver better business performance.
We are taking proactive measures to manage risks arising from our recurrent business and business growth as well as from the constantly changing business environment. Some key risks that we are currently managing include the following:
- Reputational impacts arising from programme slippage and cost overruns on network expansion projects in 2014. In response, we have implemented measures to enhance corporate governance.
- Reputational impacts arising from public dissatisfaction with the tendering process for property development projects. In response, we have formulated a comprehensive communication plan and reviewed our tendering strategy for individual property development projects.
- Risks to successful completion of four major new railway projects that are underway in Hong Kong, including general shortage of workers, geotechnical difficulties, and technicalities related to carrying out construction activities in close proximity to operational rail lines and urban developments.
- Service disruptions and over-crowding in some sections of our network. Please refer to Customers.
- Impacts of workforce transition and growing manpower needs. Please refer to Staff.
In mid-2014, the ERC conducted a thorough review of the ERM framework and implemented some new measures to raise risk awareness across all levels of the organisation. These measures include launching our first Risk Awareness Week in October 2014, introducing a computer-based ERM training programme for managers, holding regular meetings of the Executive Committee to discuss top risks and emerging risks, and increasing the frequency of reporting by the ERC to the Executive Committee and the Board. These enhancements are helping to reinforce a risk-informed and risk-aware culture.
We keep ourselves abreast of the latest developments in risk management through reviews with users, cross-industry benchmarking and experience sharing. During Risk Awareness Week 2014, we engaged external risk experts to share best practices on risk management with our executives, senior managers, members of the ERC and divisional risk co-ordinators.