INTEGRATED ANNUAL REPORT 2024 198 199 SECTION 12: GOVERNANCE www.miscgroup.com MISC BERHAD PRA Risk Area Risks for participation in new capital-intensive projects are assessed using criteria that, at a minimum, focus on material risks, including commercial, execution, operations, country, and financial aspects. PRA Reporting Structure The risk assessment is deliberated by the MISC’s PRA Sub-Committee, (i.e., sub-committee from the MRC) and BSRC for endorsement before Board of Directors’ approval. CRISIS MANAGEMENT Crisis Management is a holistic and cohesive approach designed to enhance MISC Group’s ability to anticipate, prepare for, respond to, and manage crisis across all risk dimensions of people, environment, assets, and reputation. The MISC Strategic Crisis Management Guideline (SCMG) was established in 2023 replacing MISC Group Crisis Management Plan, 2019. The SCMG details the roles and responsibilities allocated under the crisis management structure and used in the preparation and planning of a crisis response across MISC Group. A three-tiered response system provides the demarcation of roles and responsibilities between emergency site management, business segment/subsidiary management, corporate and internal/external response agencies, and/or authorities. Key ERM Activities in FY2024 • Reviewed and endorsed the MISC Group Risk Register and the Primary Risk Events for FY2024. • Reviewed and endorsed the Statement of Risk Management and Internal Control for inclusion in the MISC Integrated Annual Report FY2023. • Reviewed and endorsed the Financial Risk Appetite Setting for FY2024. • Monitored and reported the status, risk indicators and thresholds for MISC Group Risk Appetite and Enterprise Risk Management on a quarterly basis. • Undertook risk assessments for participation in new projects/tenders and monitored the progress of new projects under the PRAF. • Reviewed and provided appropriate recommendations for the MISC Group Corporate Risk Profile for FY2025. • Conducted the annual ERM focused training session for risk focal points across the Group as part of a continuous upskilling program. In 2024, a training and workshop session on ERM principles and practices, focusing on identifying and managing strategic and ESG-related risks, was conducted. Statement on Risk Management & Internal Control An integrated crisis management drill was conducted in 2024 based on a simulated incident in order to test the effectiveness of the SCMG and the Crisis Management Team (CMT) in ensuring a coordinated and timely response during crisis. Additionally, drill exercises were conducted for emergencies on vessels and offshore facilities, validating response plans and promoting continuous improvement. These proactive measures highlight the Group’s commitment to enhancing crisis management capabilities, ensuring swift and effective responses to unforeseen challenges, and fostering resilience. BUSINESS CONTINUITY MANAGEMENT Business Continuity Management (BCM) aims to build the capability of the MISC Group to recover and continue the operations of critical business functions in the event of disruption. In 2024, MISC has established the Business Continuity Management Framework (BCMF) to set expectation for clear and consistent BCM practices throughout the MISC Group. Through the BCM process, the Business Continuity Plan (BCP) is developed to enhance MISC Group’s readiness to recover and restore essential business functions within a reasonable time to sustain business activities and minimise stakeholder disruption. Annual Business Impact Analysis and recovery strategy reviews are carried out to ensure changes in the Group is risk-assessed, analysed and mitigated. The mitigation action also takes into consideration different work environments such as flexible working arrangement and other remote working arrangements. This is achieved seamlessly by the application of technology, deployment of digital platforms for communication and collaboration to ensure our teams are able to work remotely and effectively. Through the operational resilience that MISC Group has built over the years and the well-executed recovery plans, MISC Group was able to provide uninterrupted services to its clients, as well as internal and external stakeholders, globally. An incident beyond MISC Group’s capacity to control and consequently requires action from Government and/or other external parties. There may be potential for multiple fatalities and severe damage/injury to assets/personnel and the environment involving neighbouring sites and surrounding communities. A situation where there is danger to life and risk of damage to environment, property and reputation. The incident is within the control of Business/Services Unit/Subsidiary with limited external assistance. A situation where there is no danger to life, nor risk of damage to environment, property and reputation. The incident is within the control of the unit/site with limited external assistance. Tier 3 Crisis Tier 2 Major Incident Tier 1 Minor Incident Notification & Escalation Group Crisis Management Team led by President & Group Chief Executive Officer (Group CEO) Emergency Management Team led by respective MD/ CEO or Vice President (VP) Emergency Response Team led by On-Scene Commander Statement on Risk Management & Internal Control
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