Risk Management

Key Stakeholders: Shareholders/ Customer and Consumer/ Government and Civil Society Sectors

Risk management and business continuity management are integral to corporate governance, one of the key principles for sustainable growth. Given the rapidly changing business landscape, Mitr Phol has prioritized appropriate risk management and business continuity management. This involves establishing the Risk Management Policy, defining risk appetite, developing a risk management process, and building risk management knowledge. The Company regularly reviews its policy and continuously improves the risk management process and tools to respond to increasing risks and ensure preparedness for effective management.

2023 Target and Performance

Cultivating a risk management culture as part of the corporate culture is an important goal for Mitr Phol. This begins with establishing the Risk Management Policy, which is reviewed annually, and extends to enhancing knowledge to foster understanding and awareness. The aim is to empower Mitr Phol personnel to apply the risk management process as an effective operational tool. Significant progress in cultivating risk management culture in 2023 includes:

Communicate the risk management policy

The updated policy approved by the Board of Directors was communicated to employees through various channels, such as internal emails and risk management representatives of each business unit.

Communicate knowledge and understanding of the risk management process and the likelihood of key risks impacting the Company’s businesses.

The likelihood of key risks and issues impacting the Company’s businesses was communicated to directors and executives on a quarterly basis. Training was provided for employees from the officer level up on basic risk management through designated channels.

Conduct business continuity plan drills

Business continuity plans were drilled in 7 areas to prepare for potential threats.

Management Approach

Risk Management Structure

Mitr Phol recognizes the importance of risk management and firmly believes that implementing an effective, integrated risk management process at all levels is crucial for reducing uncertainty and increasing the likelihood of achieving business goals. This approach will help the Company generate sustainable growth and returns for shareholders while enhancing its credibility with stakeholders.

Mitr Phol has adopted the COSO Enterprise Risk Management Integrated Framework as a tool for managing risks across the organization. The Board of Directors has delegated the Risk Management Committee to oversee the implementation of the Risk Management Policy and framework, monitor the risk management process, ensure the adequacy of managing key risks to maintain the risk appetite and report the results to the Board. The Risk Management Department is responsible for communicating the policy and the Board’s recommendations and collaborating with other business units to ensure organization-wide implementation. It also reviews, monitors, and reports key risks to the Risk Management Committee. This department reports directly to the Governance, Risk, and Compliance Division, the Corporate Sustainability Sub-business Group, which operates independently from the core businesses.

Mitr Phol’s Risk Management Structure

Risk Management Process

Mitr Phol prioritizes the continuous monitoring and assessment of risks in a changing business environment to ensure alignment with the organization's strategy and objectives. Risk assessments are reviewed annually and continuously monitored to evaluate significant situations. This process includes evaluating environmental, social, and governance risks to support sustainability goals. The Risk Management Department is the key unit responsible for coordinating with other business units to review, assess, monitor, and report key risks to the management of each unit and the Risk Management Committee. The department then conducts organizational-level risk assessments and reports the results to the Board of Directors.

The assessment and essential risk factors management in 2023 are as follows:

2023 Significant Risk Factors

Emerging Risks

Business Continuity Management

Business continuity management (BCM) is vital to Mitr Phol’s operations. To ensure that operations can run smoothly even in critical situations, the Company conducts drills of the business continuity plan (BCP) at least once a year, while the BCP is reviewed and updated annually. This review includes enhancing key activities, communication processes, and resources. The practice, which is based on the Business Continuity Management System (BCMS) under the ISO 22301:2012 standard, serves as a framework for action at both headquarters and plant locations. The Risk Management Department collaborates with the Safety, Occupational Health, and Environment Department to hold the annual drill, which is participated in by executives, employees, and stakeholders. The drill covers the Emergency Response Plan (ERP), Business Continuity Plan (BCP), and the Crisis Communication Plan, as appropriate, aiming to raise awareness of the roles and communication protocols outlined in the BCP.

In 2023, another 2 BCPs were conducted at Mitr Amnat Charoen Sugar Mill and Maesod Clean Energy Co., Ltd., resulting in a more comprehensive plan across all operational sites. This expansion enables Mitr Phol to better mitigate significant risks. The BCPs now encompass the head office and all plants, with drills conducted in 7 areas. These drills facilitate the review of management processes, roles and responsibilities, and customization of the BCP for each area to ensure constant readiness to address threats.