MISC Integrated Annual Report 2020

// Key Messages / Highlights / Strategic Review / Sustainability / Financial Review ////// MISC Berhad / Integrated Annual Report 2020 4 86 MISC Berhad / Integrated Annual Report 2020 4 87 ////// Financial Review / Sustainability / Strategic Review / Highlights / Key Messages // Section Section Capitals Affected: Human | Social and Relationship Capitals Affected: Financial | Physical | Human | Intellectual Capitals Affected: Social and Relationship | Financial Trend: Upward Trend: Neutral Trend: Neutral Description: Cybersecurity incidences recorded an increasing trend globally, including cyberattacks in the shipping and oil and gas industry. The growing trend of digitalisation and automation, added with the implementation of alternative working arrangements (e.g. work from home), increases the cybersecurity risk and exposure. Description: In the fast pace and evolving environment, failure to retain a good human capital team, as well as inability to significantly equip employees with up to date knowledge and skills, may impair the effective rollout of the Group’s strategic objectives in the long run. Description: Non-compliance to regulations or violation to any laws such as bribery and corruption, misuse of confidential data and information, manipulation of conflict of interest positions, infringement of human rights and modern slavery, breach of economic sanctions and export control regulations may well lead to litigation risks, financial impacts and reputational damage. Mitigation / Response: • MISC’s cybersecurity team continuously upgrades and strengthens cybersecurity controls throughout the Group’s IT landscape • Periodically performing detailed cybersecurity assessments to identify potential vulnerabilities and weaknesses and testing our information systems’ susceptibility to attacks and closing any gaps identified from the assessments Mitigation / Response: • Undertaking detailed succession planning and initiatives to ensure a sustainable pipeline of talent is available to meet the Group’s requirements, including identifying and developing future leaders • Deploying a structured and holistic development process with the objective of continuously building employees’ competency and capability level. This ultimately caters for the need of readily-available successors at all levels • Providing clear direction and career growth opportunities to employees, in addition to keeping up to date with employee scheme and rewards that are competitive throughout the industry Mitigation / Response: • Ensuring strict adoption and implementation of policies such as Anti-Bribery and Corruption (ABC) as well as Code of Conduct and Business Ethics (CoBE) • Carrying out structured implementation of compliance initiatives of which the aim is to create a mature compliance and ethics culture, where ethics and integrity become part of all business conduct and transactions. This includes the involvement and commitment across all levels, and up to the Board and Management • Implementing tight internal controls and conducting assurance activities to monitor adherence to regulations and policies CYBERSECURITY DEVELOPING AND RETAINING TALENT GOVERNANCE AND INTEGRITY Material Matters: Employee Engagement | Diversity and Inclusion Material Matters: Health and Safety | Risk Management Material Matters: Values and Governance Capitals Affected: Financial | Physical | Intellectual | Social and Relationship | Human Capitals Affected: Human | Financial | Physical | Social and Relationship | Natural Trend: Neutral Trend: Neutral Description: In new shipbuilding and construction of own assets, conversion of vessels and floaters, delivering clients’ orders/contracts, or even internal process improvements and enhancements, it is imperative that the Group maintains an effective project management process and implementation throughout. Potential delay of project completion, cost overruns and quality shortcomings, among others, are risks associated with project management which may result in delayed earnings, missed opportunities, reputation loss and even litigation cases. Description: Any major HSSE incidents involving any one of our assets may result in injury or loss of life, asset or environmental damage, financial or reputational impact. Mitigation / Response: • Establishing dedicated project management teams for all projects, involving subject matter experts (SMEs) to ensure detailed planning and efficient project implementation • Ensuring project governance and controls are in place for every project, through the establishment, promotion and adherence to project management procedures throughout the Group • Carrying out independent project reviews via the Project Risk Assessment (PRA) platform that deliberates risks associated with each project Mitigation / Response: • A strict HSSE policy is adopted and embedded into the Group’s working culture • The GHSSE council continuously monitors all HSSE- related risks and matters as well as implementation of improvement initiatives PROJECT MANAGEMENT HEALTH AND SAFETY Material Matters: Project and Financial Performance | Business Knowledge and Expertise Material Matters: Health and Safety | Customer Satisfaction OUR RISKS AND MITIGATION STRATEGIES

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