- In order to build a complete risk management system; strengthen effectiveness of corporate governance; ensure comprehensiveness, effectiveness, and reasonableness of risk management, as well as effectively evaluate and oversee risk-bearing capabilities of the Corporation to determine risk response strategies and implementation of risk management procedures, the Corporation's "Risk Management Regulation" and related "Risk Management Policies" were established following approval of the 27th meeting of the 8th Board on June 19, 2019 to provide reasonable assurance of the Corporation's mid- to long-term strategic plans and achievement of targets.
- The Corporation has inventoried and identified, in a proactive and cost-effective manner, possible risks that may impact operations and profits due to Corporation business and operational activities, the main considerations being business environments, operations, finances, hazardous incidents, and other aspects. We have also reviewed comprehensiveness of corporate risk management procedures and effectiveness of risk management controls, and conducted risk evaluations of environmental, social, and corporate governance issues relating to operations by principle of materiality; these evaluations are used to establish implementation systems and identify main risk categories. For more information regarding these risks and relevant response measures and actions, please refer to the following table.
- The Corporation's various committees (such as the Audit Committee, Safety Committee, Information Security Committee, Corporate Social Responsibility Team under the Corporate Governance Promotion Committee, and so on) all participated in establishing the aforementioned risk management measures, issues, evaluations, and polices, and are assisting in promotion thereof.
- The Corporation's risk management implementation status and progress are reported to the Board each year.
✓ A risk management report for 2019 was approved by the 30th meeting of the 8th Board on September 18, 2019.
✓ A risk management report for 2020 was approved by the 6th meeting of the 9th Board on September 16, 2020.
- Implementation structure for risk management:
- Main risk categories, risk assessments, and response measures and actions:
|Material Issues||Main Risk Categories||Risk Assessments||Risk Management Strategies and Related Response Measures and Actions|
|Environmental||Environmental Risks||Assess various environmental risks (such as global warming, extreme weather conditions, earthquakes, land subsidence, and formation of new fault lines) can cause revisions in laws and regulations, system damages, regional power cuts, and water shortages, which may affect service quality and increase maintenance and operation costs.||
|Social||Operational Safety Risks||Assess HSR systems that may be affected by internal and external factors such as malfunctions of facilities and equipment, human error, intentional sabotage, or other external factors, which may affect train safety; cause injury to our employees, passengers, contractors, or the general public; or cause delay or cessation of rail operations.||
|Corporate Governance||Information Security Risks||THSRC is a Critical Information Infrastructure provider, and also a Level-A Cyber Security Responsibility Unit. Assess all HSR information systems and take into account various aspects including confidentiality, comprehensiveness, accessibility, and legal compliance.||
|Financial Risks||Assess changes in domestic and overseas economic and financial conditions that may impact our income, maintenance and operation costs, interest rates, and exchange rates, which in turn may affect our profitability and cash flows.||