8 Description Incidents that result in injury, loss of life, damage to asset and environment due to poor HSSE culture and management. Implications • Disruptions to business • Unsafe working environment for personnel/ workforce • Major reputational damage to the Group • Financial and commercial losses due to penalties, clean-up costs and loss of customers Mitigation/Response • HSSE policy adopted and embedded into the Group’s working culture • Conducting HSSE assurances on assets to ensure integrity and reliability are maintained • Continuously monitoring all HSSE related risks Trend Neutral HEALTH AND SAFETY Material Matters Capitals Affected Description Acceleration in the digital transformation of business and operations calls for stringent and improved processes and technologies to protect our data and information and avoid breaches and leakages Implications • Reputational damage and loss of trust among stakeholders • Business disruptions and exposure to penalties for potential leakage of information Mitigation/Response • Implement Cybersecurity Control Standards • Continuous cybersecurity assessment to identify potential vulnerabilities and weaknesses • Inculcate the cybersecurity culture through awareness and training • Exploit newer technologies and methods to detect any data leakages and other breaches Trend Upward 9CYBERSECURITY Material Matters Capitals Affected 6 Description • Under-utilisation and unavailability of assets/ vessels due to poor maintenance or operational inefficiency • Stiffer competition in the market with newer, technologically advanced, and fuel-efficient vessels • Vessels are subject to volatility of freight rates due to cyclical nature of the shipping market and therefore impacting utilisation Implications • Disruptions to the business due to repairs, breakdowns and prolonged off-hire periods • Inability to meet asset performance targets and requirements, which may impede vessel tradability • Not keeping up with the minimum vessel capability results in assets being stranded/ idle Mitigation/Response • Maintenance works are timely performed as planned • Leveraging on technology and the Internet of Things (IOT), up-to-date systems in developing effective maintenance schedules and ensure tradability of the fleet • Maintaining highly skilled and trained personnel to operate assets at optimal levels • Continuously reviewing and monitoring vendors and third-party service providers’ performance to ensure consistent high standard of practices in supporting the Group’s operations and maintenance of assets Trend Neutral ASSET AVAILABILITY, UTILISATION AND MARKETABILITY Material Matters Capitals Affected 7 Description Compliance with statutory and regulatory requirements which govern our operations and activities. This also includes meeting internationally accepted standards and best practices for compliance and ethics. Implications • Potential litigation risks, financial disputes, reputational damage and other impacts due to non-compliance to critical laws and regulations • Exposed to business disruptions and loss of trust Mitigation/Response • Ensure adherence to MISC’s Anti-Bribery and Corruption manual, Code of Conduct and Business Ethics, Economic Sanctions and Export Control, and Competition Law among others • Performance and adherence towards relevant laws and regulation embedded into the overall key performance measurement • Conducting assurance activities and continuous awareness and training on the laws surrounding ethics and compliance Trend Neutral GOVERNANCE AND INTEGRITY Material Matters Capitals Affected OUR RISKS AND MITIGATION STRATEGIES 10 Description • Challenge to attract and retain talents in a maritime industry remains stiff • Inability to retain a strong human capital team and develop knowledge and skills in line with industry demands Implications • Insufficient pool of readily available successors to assume critical positions • High attrition and undeveloped skills impede achievement of business targets and growth Mitigation/ Response • Undertake detailed succession planning and initiatives to ensure a sustainable pipeline of talents • Deploy a structured and holistic development process with the objective of continuously building employees’ competency and capability levels • Implementation of a structured Functional Competency and Leadership Competency framework Trend Neutral TALENT DEVELOPMENT AND RETENTION Material Matters Talent Attraction Diversity and Inclusion Capitals Affected Intellectual Human Cybersecurity Financial Human Health and Safety Financial Human Values, Governance and Business Ethics Financial Physical Social & Relationship Financial Performance Human Rights Security Social & Relationship Strategic Review Strategic Review 75 74 MISC Berhad Integrated Annual Report 2022
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