2015 ERM Activities
For 2015, the following are the improvements in the Risk Management System of Manila Water:
- Creation of Risk Committee of the Board of Directors. In line with best corporate governance practices and to further improve management of risks, Manila Water created a separate Risk Committee to handle risk-related responsibilities previously covered by the Audit and Governance Committee. In compliance with its charter, the Risk Committee discussed with management the adequacy and effectiveness of the ERM process, including significant risk exposures, the related risk mitigation efforts and initiatives, and the status of the mitigation plans. While the Risk Committee provides oversight on the risk management activities, the Company’s management remains primarily responsible for the risk management process.
- Strengthening of ERM Structure. Manila Water implemented changes on its ERM Structure to align with organizational changes. Separate RMECs were established for Manila Water Operations, Manila Water Philippine Ventures / Asia Pacific and Manila Water Total Solutions.
- Conduct of Black Swan Workshop. To improve its risk sensing capability, Manila Water engaged risk experts to conduct a black swan workshop for the Senior Leadership Team and Management Committee. The exercise enabled the management to challenge business assumptions and identify the black swans of the Company. The results of the exercise were used to validate the top risks identified earlier during the year.
- Enhancement of Risk Management Excellence Awards Program. Manila Water expanded the reach of its risk management excellence awards program to include the subsidiaries considering their states of readiness. Other components of the ERM maturity were also added in the criteria for the Risk Management Culture category.
- Inclusion of ERM maturity in Corporate and Group Targets. Since Manila Water already exceeded its maturity rating targets, the ERM maturity rating was included as a penalty item in the corporate and group targets for 2015. This implies that business units will be penalized during performance appraisal if they fail to comply with ERM requirements.
- Quality Management System for Insurance Management. A Quality Management System based on ISO 9001:2008 was established for Insurance Management. New processes such as insurance program review, claims management and monitoring, risk survey for Manila Water facilities, insurance broker service bidding/selection and evaluation have been developed and implemented.
- Insurance Roadshow. Manila Water conducted its first insurance roadshow in 2015 which highlighted the risk management activities for property and projects. The roadshow resulted in insurance coverage which took into consideration the risk management activities of the Company.
In addition, an external assessment of Manila Water’s ERM maturity was conducted by Aon Philippines. Manila Water achieved a Risk Maturity Index of 4.5 placing Manila Water between the operational and advanced levels of ERM implementation. The 4.5 score is also above the global average for all industries (3.0) and global average for utility companies (2.5).