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Sustainability
Report
SOCIAL RESPONSIBI L I TY & CORPORATE GOVERNANCE
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As the Manager of A-REIT, AFM recognises the importance of
being accountable to its stakeholders.
In FY12/13, the Manager embarked on a strategic approach
towards sustainability with a view of building a strong foundation
to address social and environmental issues alongside economic
performance. These foundations involve identifying and
managing risks proactively, having purpose-driven stakeholder
engagements and maintaining focus on key material issues.
The business structure of A-REIT is an externally managed one.
It is supported by a network of interdependent relationships
overseen by the Manager. Subject to the approval of the
Trustee, the core strategies of A-REIT are implemented by the
Manager as well as its Property Manager. These relationships
are formalised through comprehensive agreements to manage
and service A-REIT’s portfolio of properties and community of
customers.
Recognising potential risks with this structure, the Manager
established an Operational Risk Management Committee (the
“ORMC”) in late 2012. The ORMC is led by the Chairman of the
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the Vice Chairman and Non-Executive Director, Ms Chong Siak
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Director and AFM CEO, Mr Tan Ser Ping serving as committee
members.
The ORMC was created to specifically manage operational risk
and corporate disclosure risk within A-REIT. Specifically, these
risks involve business transactions, technology infrastructure,
human capital, and legal and regulatory compliance. The ORMC
complements the existing Audit Committee which remains
responsible for the entire risk management framework including
internal controls. Both committees are overseen by the Board.
An important foundation to all these developments is the
Manager’s implementation of an Enterprise Risk Management
(“ERM”) framework. The Manager is guided by Ascendas Group’s
ERM Manual to ensure consistent application of the framework
across Ascendas Group’s business units. The framework was
developed in 2008 with reference to international standards
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ISO31000: 2009.
The ERM framework provides guidance to the Manager on risk
policies, risk governance structure, roles and responsibilities
as well as the approach undertaken to implement ERM. The
ERM process of aligning risk-taking activities to incorporate
risk appetite, managing risk to acceptable levels following
rigorous assessments and assigning risk responsibilities and
accountabilities are fundamentals to building a robust corporate
governance framework.
To ensure continued vigilance, the Manager and its supporting
business units update and track risk registers, monitor and
report on their relevant risks and controls on a quarterly basis.
Meetings are conducted to discuss and deliberate on risk related
subject-matter such as current and emerging risks issues,
effectiveness and efficiency of existing internal controls, status of
action plans for addressing risks, amongst others. These reports
are submitted to the Audit Committee to inform them of any
existing or developing risks that require their attention or action.
In addition, as a compliance measure, risks owners are required
to certify twice a year that the risk management process has
been fully complied with. The risk management process involves
identifying, analysing and evaluating new risks, addressing these
risks, as well as monitoring and reviewing current risks if they
remain applicable to the business.
Supporting the ERM framework is A-REIT’s Business Continuity
Management (“BCM”) framework. Adopted from the Ascendas
Group, the BCM builds resilience and capability by providing a
systematic response to various threats or impacts to A-REIT’s
operations. The Manager maintains business continuity plans
in areas such as IT disaster recovery, pandemic preparedness,
emergency evacuation, and crisis management. The table below
is an example of Ascendas Group’s Business Continuity Plans.
It provides details on the Business Continuity Plans and how
they are applied to and managed for A-REIT.
ANNUAL REPORT FY12/13 79