RISK MANAGEMENT How it is embedded in the enterprise
Manila Water continues to grow and live up to its status of being the most successful model of public-private partnership in the Philippines. Risk management is a key contributor to this success. At all levels of the organization, risk management is consistently used as a tool for effective decision-making, planning and operations, resulting to a resilient and agile organization amidst difficulties in its regulatory and physical environment.
ENTERPRISE RISK MANAGEMENT IN MANILA WATER
Manila Water operates in a regulated and dynamic business where uncertainties, both detrimental and opportune to the Company, abound. The Company is accountable to its regulators, shareholders, employees and customers, among others, even as profitability, sustainable development and corporate social responsibility are expected to be continuously enhanced. In order to achieve its corporate objectives, Manila Water recognized the need for the active management of risks inherent in its business which involves the entire organization.
Manila Water continues to implement its Enterprise Risk Management (ERM) Program based on a globally-accepted approach, the ISO 31000:2009. Under the Program, Manila Water integrates risk awareness and responsibility at each level of management activities, and into all strategic planning and decision-making processes within Manila Water and its subsidiaries to support achievement of strategies and objectives. The ERM Program has been cascaded to all the departments in Manila Water. The same has been rolled out to subsidiaries in Boracay, Cebu, Clark and Laguna and its affiliates in Vietnam to ensure the attainment of their respective growth objectives. The rollout considered the unique business and risk environment where these subsidiaries operate.
The ERM Program operationalizes the Company’s Manual of Corporate Governance which mandates the Board of Directors (BOD) to ensure the presence of organizational and procedural controls supported by an effective management information system and risk management reporting system. In addition, the Company’s Risk Committee, as stated in the Risk Committee Charter, is required to provide oversight to management functions relating to strategic, financial, operational, compliance, legal and other risks of the Company which involves periodic disclosure of significant risk exposures and related risk management activities.
The President is the comprehensive risk executive and is ultimately responsible for ERM priorities, strategies, tolerances and policies. He chairs the Risk Management Executive Committee (RMEC) which is composed of top management and the Chief Risk Officer (CRO). The RMEC provides oversight and input to the President and to the Board to enable them to formulate better and informed decisions on matters relating to risks. The RMEC provides direction on the design and implementation of appropriate systems, tools and methodologies to support the ERM process and other risk management activities, and designates owners of specific risks and enablers of the ERM process (ERM Champions).
The CRO is the ultimate champion of ERM at Manila Water. Supporting the CRO is the Enterprise Risk and Insurance Management (ERIM) Department. It is responsible for developing risk management tools, methodologies and processes, and leads the implementation and dissemination of ERM across Manila Water in coordination with the risk owners or the CRO and ERM Champions of the business units.