Chapter 1 General Principles
Article 1
To further strengthen risk management, establish a standardized and effective risk management system, and promote the company's sustainable, healthy, and stable development, this system is formulated based on national laws, regulations, supervisory requirements, and the Articles of Association, combined with the company's actual situation.
Article 2
The company's risk management aims to provide reasonable assurance for achieving the following objectives:
- To keep risks within a range that is compatible with overall objectives and manageable.
- To ensure the authenticity and reliability of internal and external information communication.
- To ensure compliance with laws and regulations.
- To improve the efficiency and effectiveness of the company's operations.
- To ensure the establishment of crisis management plans for significant risks, preventing major losses due to catastrophic risks or human errors.
Article 3
The term "company risk" refers to the impact of future uncertainties on the company's ability to achieve its operational goals.
Article 4
Company risks can generally be categorized into strategic risks, market risks, operational risks, financial risks, and legal risks:
- Strategic Risks: Including macro policy, economic risks, industry risks, and merger risks.
- Market Risks: Including commodity price risks, customer and supplier credit risks, and interest rate risks.
- Operational Risks: Including safety production risks, information system security, and human resource risks.
- Financial Risks: Including financial reporting risks, investment risks, financing risks, liquidity risks, and tax risks.
- Legal Risks: Including compliance risks with laws and policies, employee ethics, and legal disputes.
Article 5
Risks are classified based on whether they can bring profit opportunities, into pure risks (only potential losses) and opportunity risks (potential for both losses and profits).
Article 6
The basic process of risk management includes the following main tasks:
- Collect initial information on risk management.
- Conduct risk assessments.
- Develop risk management strategies.
- Formulate and implement risk response measures.
- Supervise and improve risk management.
Article 7
This system applies to the company and its wholly-owned and controlling subsidiaries included in the company's consolidated financial statements (hereinafter referred to as "subsidiaries").
Chapter 2 Risk Management and Internal Control
Article 8
The company should emphasize risk management and establish a risk management system suitable for the company based on the existing internal control system, promoting the integration of risk management and internal control.
Article 9
The management team is responsible for designing, implementing, and supervising the risk management and internal control systems, and regularly providing management reports to the board of directors on the effectiveness of these systems, ensuring the board is informed of the risks and the implementation of appropriate policies and controls.
Article 10
The board of directors is responsible for assessing and determining the nature and extent of risks the company is willing to accept in achieving strategic objectives, supervising the management's design, implementation, and monitoring of the risk management and internal control systems, and ensuring the establishment and maintenance of appropriate and effective systems.
Article 11
The board should continuously monitor the company's risk management and internal control systems, ensuring at least an annual review of their effectiveness, and report the findings in the Corporate Governance Report to shareholders. The review should cover all significant monitoring aspects, including financial monitoring, operational monitoring, and compliance monitoring.
Article 12
During the annual review, the board should ensure that the company has sufficient resources, qualifications, and experience in accounting, internal auditing, and financial reporting functions, as well as adequate training programs and budgets related to environmental, social, and governance performance.