Manual on Corporate Governance
Code of Conduct and Business Ethics
Annual Corporate Governance Report
Board Committees and Charters
2015 SMPC Integrated Annual Report
Risk Committee Charter
SEMIRARA MINING AND POWER CORPORATION
Risk Committee Charter
(As approved by the Board of Directors in March 2015)
The Board of Directors of Semirara Mining and Power Corporation has established a Risk Committee to assist the Board in fulfilling its oversight of risk management function. The primary purpose of the Risk Committee is to oversee and approve the Company’s Enterprise-wide risk management framework through the following:
• Overseeing that Management has identified and assessed all the risks that the organization faces and has established a risk management infrastructure capable of addressing those significant risks affecting the achievement of the Company’s objectives; and
• Overseeing, in conjunction with other Board-level Committees or the full Board, that risk-related responsibilities of each Board Committee are clearly addressed.
The Risk Committee will comprise of three or more Directors as determined by the Board. The membership will include a combination of executive and non-executive directors. Each member will have an understanding of risk management expertise commensurate with the company’s size, complexity, capital structure, business and industry.
The Committee and the Committee Chairperson shall be appointed by the Board upon the recommendation of the Nomination and Election (NOMELEC) Committee. Each Member shall be diligent in disclosing relationships significant to the Company and related companies/parties or himself that might potentially compromise his independence in his oversight duties.
The Committee Member’s term shall be for one year. Committee Members may be replaced at any time by a majority of the Board in office.
All Committee Members must be Directors of the Board. A Member’s cessation as a Board Director means his automatic termination as a Committee Member.
Committee Members shall be entitled to committee meeting per diems or fees.
The Board has granted the Risk Committee the authority to meet with and seek any information, advice and assistance it requires from employees, officers, directors, or external parties to perform its duties and responsibilities. The Risk Committee shall also have the authority to conduct investigations into any matters within its scope of responsibility, as necessary,
The Committee has the authority to retain, at the Company’s expense, persons having special competencies to assist or advise the Committee in fulfilling its responsibilities.
In addition, the Risk Committee may meet with other Board Committees to avoid overlap as well as potential gaps in overseeing the organization’s significant risks.
The Committee shall meet at least twice in a calendar year, or more as determined by the Committee.
The Committee chairperson will approve the agenda for the committee’s meetings. A written agenda and relevant meeting materials shall be provided as far in advance of meetings as practicable, or at least three (3) days before each meeting to the Committee Members and any other person/s invited by the Committee as necessary, to have adequate time for preparation and reading.
A majority of the Committee Members shall constitute a quorum, and the act of a majority of those present at any Committee meeting at which there is a quorum shall be the act of the Committee.
The Committee may request Management, the Chief Risk Officer (or Designate), Chief Governance Officer, Business Unit Heads, internal auditors, external auditor, outside counsel or consultant to attend a Committee meeting or to meet with any Committee Member.
The Company’s Chief Governance Officer or any other person nominated by the Committee shall be the Secretary of the Committee in its meetings.
The Committee shall provide copies of the minutes of each meeting to the Board as soon as practical after each Committee meeting.
Duties and Responsibilities
The Committee’s duties and responsibilities shall be as follows:
1. Enterprise Risk Management (ERM)
1.1 Review and assess the adequacy and effectiveness of SMPC Group’s ERM, risk management system, policies and activities on risk identification, assessment, mitigation, control systems, reporting and monitoring, including Management’s approach to the management of risks on economic dependency, operating risks, compliance and reputation risk, insurance adequacy and business continuity.
1.2 Promote risk awareness and best practices in the organization.
1.3 Ensure integration of risk management into the organisation’s goals and compensation structure, and create a corporate culture such that people at all levels manage risks effectively;
1.4 Review and approve the risk management infrastructure and the critical risk management policies, risk appetite and tone at the top throughout the organization;
Monitor the organization’s risk profile, its topmost and strategic risks vs. risk limits and risk strategy in accordance with approved guidelines
1.6 Continually, as well as at specific intervals, monitor risks and risk management capabilities within the organization, including communication about escalating risk and crisis preparedness and recovery plans
1.7 Continually obtain reasonable assurance from Management that all known and emerging risks have been identified and mitigated or managed
1.8 Oversee risk review activities regarding strategic and business development decisions (e.g. acquisitions), initiatives (e.g. new business segment), transactions and exposures
1.9 Review and approve the risk management plan at least annually. The risk management plan shall consider the maturity of the risk management of the organization and tailored to its specific circumstances, and include:
a. the company’s risk management structure
b. the risk management framework i.e. the approach followed, for instance, COSO, ISO, IRMSA ERM Code of Practice, etc.
c. standards and methodology adopted, e.g. measureable milestones such as tolerances, intervals, frequency rates, etc.
d. reference to integration through training and awareness programs, and
e. assurance activities on the risk management process.
2. Board Committees
2.1 In coordination with the Audit Committee, understand how the organization’s internal audit plan is aligned with identified risks, risk governance and risk management information needs
2.2 Monitor all enterprise-wide risks, and as such, recognize the responsibilities delegated to other Board Committees with the understanding that other Board Committees may emphasize specific risk monitoring through their respective oversight duties
Committee Training and Education
The training needs for each Risk Committee Member will vary, depending on an individual’s area of expertise and knowledge. The Board’s development program provides Directors continuing education opportunities to enhance their contribution to the Board and its Committees. Risk Committee Members shall be encouraged to attend training seminars and conferences focusing on topics such as leading practices with regard to risk governance, oversight and risk management. Costs of courses and seminars attended by Committee Members are borne by the Company.
Committee Succession Planning
The Board’s NOMELEC Committee undertakes the responsibility for succession planning for the Board to ensure that positions are filled not just in terms of board membership, but also committee membership, board and committee chairs. The Risk Committee, in conjunction with the Board and the NOMELEC Committee, may consider and plan for succession of its Committee Members.
The Committee Chairperson shall report matters requiring the Board’s proper disposition and attention regularly. The Committee shall prepare an annual report to the Board and shareholders for its performance of oversight duties during the year, describing the Committee’s composition, responsibilities and how they were discharged, and any other regulatory information.
To ensure timely communication and updates of risk matters to the Board and Shareholders, the Committee shall :
• Keep risk on both the full Board agenda on a regular basis
• Effect coordination (via meetings or overlap of membership), along with the full Board, and communications with risk-related matters among the various committees, particularly between the Audit and Risk Committees;
• Disclose in the Integrated Annual Report how it has satisfied itself on the adequacy and effectiveness of the Company’s risk management system, including risk assessments, responses and mitigations.
The Committee shall review and reassess the adequacy of this Charter annually and update it as needed to respond to new risk-oversight needs and any changes in regulatory or other requirements. It shall submit the Charter and changes, if any, to the full Board for approval.
The Committee shall annually conduct a self-assessment of its own performance relative to its purpose, duties and responsibilities.