77 Annual Report 2024 RISK GOVERNANCE The Board of Directors (the Board) oversees risk governance, and ensures that Management maintains robust risk management and internal control systems to safeguard the interests of CLCT Group and its stakeholders. The Board, with support from the Audit and Risk Committee (ARC), approves CLCT Group’s risk appetite (risk tolerance) that determines the nature and extent of material risks the Manager is willing to take to achieve strategic objectives. The Board also regularly reviews CLCT Group’s risk profile, material risks and mitigation strategies, and ensures the adequacy and effectiveness of the risk management framework and policies. CLCT Group’s Management team supports the Board and ARC to ensure effective risk governance and oversight. They are responsible for directing and monitoring the implementation of risk management practices throughout the CLCT Group, which includes tracking risk exposure using key risk indicators. Approve CLCT Group’s risk appetite and review CLCT Group’s risk profile Direct and monitor the implementation of risk management practices CLCT Board of Directors Audit and Risk Committee Management INTERNAL CONTROLS SYSTEM CLCT Group ERM Framework operates within a risk governance structure comprising three lines of defence to foster a strong culture of risk awareness. A Strong Culture of Risk Awareness • Nurturing a strong risk culture helps ensure effective and consistent implementation of risk management practices throughout the CLCT Group. • The Manager collaborates closely with the risk management and compliance departments at CLI as well as various specialist support functions, to instill a culture of risk ownership and accountability. • In addition, the departments under the second line of defence regularly conduct workshops to enhance employees’ understanding of risk management and ensure the integration of risk management principles into decision-making and business processes. • Management reinforces this culture by setting the tone at the top, leading by example, and effectively communicating our risk management strategy to employees. • Employees are accountable for effectively identifying and managing risks arising from their business activities. • Risk champions are appointed to drive this effort. • The Internal and External Audit teams evaluate the design and implementation of risk management and internal control systems to ensure their adequacy and effectiveness. This in turn, provides the Board with reasonable assurance. • Specialist functions, including risk management and compliance, provide oversight of risk management and compliance practices, fostering and embedding a culture of risk ownership and accountability.
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