Annual Report 2020

064 Corporate Governance Report Annual Report 2020 Miramar Hotel and Investment Company, Limited Highlights of Key Risk Management Activities Emerging Risk and Crisis Management The outbreak of COVID-19 pandemic in early 2020 was a global stress event and it brought significant impact upon the Group. During the year, the Group has demonstrated resilience. In the early stage, we have established a 4-level risk alert system at the corporate level with all preventive measures and necessary resources clearly defined under each risk level. Preparatory efforts and trainings to staff to stave off the pandemic under different scenarios were arranged well in advance. All latest information on the development of the pandemic has been closely monitored by the risk management department and decisions have been centrally made by the crisis management committee, which is composed of senior management and key employees across all business units and functional departments. Once the information and decisions are cascaded down, front line staff would promptly adjust their operational procedures in order to comply with the related regulatory requirements and, at the Group’s direction, all units would take coordinated actions in line with the Group’s strategy. Please refer to pages 29 to 48 “Environmental, Social and Governance” section for more details on our responses to the pandemic. Risk Management Culture The Group believes that an ingrained risk culture is core to effective risk management. Key risk management activities such as business continuity management (“BCM”) and crisis management are introduced into the orientation program for new joiners, to promote awareness of possible risks and its mitigation measures in their daily operations. In addition, annual risk management workshop has been regularly conducted to enhance risk awareness among executives and key team members. This year, due to the COVID-19 pandemic, risk management workshop has been organized in e-format to minimize transmission risk. In workshops, we not only recap the risk management system adopted by the Group, but also share experiences on how our crisis management mechanism functioned amid the pandemic. A quiz also has been arranged after the workshop to ensure that all attendees got the key message and the response rate was 100%. Besides, we have integrated risk management activities into daily operations and regularly reviewed and tested the effectiveness of the implemented mitigation measures. Results of a series of drills pursuant to the annual BCM plan were discussed, evaluated and adjusted to ensure the plan can eventually be executed in an efficient and effective manner. Monitoring on Key Risks and High Velocity Risk Events To identify key risks to the Group, each possible risk event is assessed and prioritized based on its likelihood and impact. Besides, we have also adopted and implemented assessment of “Risk Velocity” to identify risk events that would rapidly affect the Group. Accordingly, the Group could establish more effective monitoring and control measures based on the nature of different risk events. The Group has established key risk indicators to monitor key risks to the Group. Risk alerts based on periodic analysis on the risk indicators would be provided to business management so that they could administer corresponding responses in a timely manner. In addition, risk events identified with high velocity, such as events involving health and safety, social unrest, media, system failure and natural disasters, would be controlled and monitored by embedding risk mitigation measures into day-to-day operations. The Group monitors such risk events on a daily basis and takes immediate actions to minimize impact to the Group.