Enterprise Risk Management
Enterprise Risk Management
With the resumption of business activity in 2022, we saw an improvement in the overall risk rating of Ayala Land.
We identified, managed, and tracked all significant risks, resulting in a a reduction in terms of both likelihood and severity, while remaining vigilant in implementing our mitigation and control measures. We also continued to monitor external and global risks that could affect our business in the near, medium, and long-term.
To gain a comprehensive understanding about the organizational and operational challenges in executing our business goals, we engaged in discussions with the business units. The relevant risks were evaluated in line with normalized operations, and adjustments to the new business environment were taken into account. The results of these discussions were brought to the Risk Council for a cross-functional review, which provided recommendations from a multi-discipline perspective. The findings were then presented to the Board Risk Oversight Committee for information and strategic direction.
Ayala Land’s enterprise risk management (ERM) is a fundamental part of its business discipline, ensuring that key risks are properly identified, assessed, and prioritized. This program is embedded into our operations, reflecting our commitment to responsible risk management.
The ERM program follows a multi-step iterative process starting with a ground-up risk assessment performed by each business unit led by the business unit head. These assessments provide valuable insights into the prioritization of each unit’s identified risks. The Chief Risk Officer (CRO) consolidates these assessments, and undergoes a cross-functional review with the Risk Council that is composed of senior leaders from various business lines. The Risk Council provides a multi-disciplinary and holistic approach to processing risks, holding regular cross-functional discussions to better understand risk interdependencies and interrelationships resulting in an agreement on the key risks confronting the business.
The CRO then reports the results of the discussions to senior management to prioritize the risks and their treatment, understand the drivers of emerging risks, and agree on opportunities to be pursued. These are then summarized and presented to the Ayala Land Board Risk Oversight Committee (BROC). To ensure that risks are current and relevant, a full review of ALI’s risk universe is done every three years or as deemed necessary.
The BROC meets semi-annually and provides input, evaluation, and feedback on improving ALI’s risk management process to the ALI Board of Directors, who oversee the effective management of the Company’s strategic, operational, financial, and compliance-related risks.
Through our ERM program, we are committed to proactively identifying and managing both strategic and operational risks, ensuring the long-term success and sustainability of Ayala Land.
Facilitated risk review and control assessment sessions with each of the Company’s strategic business units were conducted. The outcomes of these facilitated sessions, which included identification of key risks both at the corporate level and at each of the business units, as well as control processes, strategies and improvement plans to mitigate the key risks identified, were presented and communicated in separate meetings to the Management Committee and the Risk Committee for review and consideration.
With the key risk areas and key risk mitigation strategies across the Company identified, monitored and periodically reported, business decisions are able to consider and incorporate the following:
- New and emerging risks, both at the Company and at the operating business unit level
- Changes in risk outlook and assessment
- Changes in the status of key risk indicators
The following are the identified key risks of the Company.
- Regulatory
- Government and Political
- Project Execution and Timely Delivery
- COVID-19 or Pandemic
- Marginalization by Competitors
- Operational
- Environmental
- Financial
- Major Security, Health and Safety
- Partnerships and Alliances
- Cyber
To know more about the risks and mitigating measures, please go to pages 124 – 129 of the 2022 Integrated Report
As a major risk management strategy of the company, the BCM program has consistently been given special focus, with a great deal of planning done at SBU levels to ensure critical services or business operations continue in spite of disaster occurrences based on loss scenarios and a methodology conforming to global standards and at par with best practices.
An important aspect in the BCM program which the company also focused on was in the area of Crisis Communications. Localized Crisis Management teams were formed and oriented to handle different levels of crisis events.
The Company established a central OSH Committee to enhance Ayala Land’s safety program at a brand level. The Committee was primarily intended to ensure both regulatory compliance and improvement of the Company’s performance on safety, as well as protecting the health of its most valuable asset–its people.
As a major start, an overall Ayala Land Corporate OSH Program has been drafted and cascaded for development to the Company’s subsidiaries for program alignment and standardization. This OSH program was developed in accordance with the framework of occupational safety and health management which the Department of Labor and Employment (DOLE) of the Philippines through its Bureau of Working Conditions (BWC) is regulating and driving.
To achieve the Company’s objectives in safety and health management, the Company’s management shall ensure that programs and actions are in place and are being done religiously via the following;
• Ensuring that all employees and engaged workers (including contracted workers) receive proper orientation and needed training onwork and workplace safety before and during their employment or service engagement and as deemed necessary, based on the nature or gravity of the hazard/s in the workplace or activity.
• Putting in place a continuing communications program to keep the level of awareness on occupational safety and health of all employees and contracted workers high, eliminating complacency in job execution and keeping abreast with latest development and learning related to preventing occupational injury and illness and enhancing wellness promotion.
• Providing a system to properly assess, screen and detect workers psycho-physical state, capability and limitations in performing work safely and efficiently before employment or work engagement as well as to effectively monitor employees health and well being with respect to work and workplace hazard or exposures.
• Establishing and consistently enforcing a system of motivating positive attitude and recognizing proper behavior towards contributing to safe work conduct, good health protection and maintenance in all workplaces as well as penalizing improper work behavior or negligent action resulting to occupational injury and/or illness.
• Ensuring that all workplace hazards are proactively and continuously identified and that needed reasonable corrective measures are in place to prevent or control physical, biological, ergonomic and chemical hazards existing in all work areas or those which are developed as a result of operations or day-to-day activities.
To further promote and effectively ensure adherence to the belief and aspirations of the Company towards occupational safety and health, management shall integrate accident prevention and occupational health maintenance in evaluating the performance of both business and support units. OSH performance shall also be a regular item to be monitored and reported in the Risk Committee meetings and a regular agenda item in the regular Safety Council meetings.