Enterprise Risk Management
Meralco has a robust Enterprise-Wide Risk Management (EWRM) framework to monitor and manage its strategic, regulatory, operational and financial risks. The EWRM is also a proactive process that is well linked to corporate goals and objectives, embedded in the corporate culture and is well integrated into critical and strategic planning and operational processes of the company. EWRM helps manage risks by influencing and collaborating with internal organizations and external stakeholders to identify best practices, controls and process improvement opportunities to address risks.
The Risk Management Policy manual of the company which was approved in September 2009, provides the methodology and process for the identification and assessment of risks, defines management accountability and covers a systematic process of assessing and reporting the company’s top business risks.
The Audit & Risk Management Committee oversees the EWRM framework, the identification and assessment of top risks and reviews the effectiveness of risk mitigation strategies and treatment plans developed by management.
EWRM initiates the annual enterprise-wide assessment of the Company’s top risks. In 2013, an updated enterprise-wide risk assessment was conducted to substantiate existing and emerging risks brought about by changes in regulations, market structure developments, technological/operational issues and external forces including changes in weather patterns, customer satisfaction measures and evolving environmental sustainability issues. Top risks were likewise quantified and the designated risk owners identified were asked to develop risk treatment and mitigation plans to address the risks and potential issues that were identified. The results were presented and vetted with the Management Committee and the Audit and Risk Management Committee of the Board.
Risk reporting dashboards are currently being developed to periodically update both management and the Board on developments and trends of identified top risks. Similar EWRM capability, processes and activities are currently being rolled out to all Meralco subsidiaries and affiliates.