ENTERPRISE RISK MANAGEMENT


In line with the corporate governance infrastructure of the Company, we have adopted a group-wide enterprise risk management framework in 2002. A Manual on Risk Management was approved by the Audit Committee on February 16, 2005, designed primarily to enhance the risk management process and institutionalize a focused and disciplined approach to managing the Company’s business risks.

The risk management framework encompasses the identification and assessment of business risks, development of risk management strategies, assessment/design/implementation of risk management capabilities, monitoring risks and risk management performance, and identification of areas and opportunities for improvement in the risk management process.

A Chief Risk Officer (CRO) is the ultimate champion of enterprise risk management at Ayala and oversees the entire risk management function. On the other hand, the Risk Management Unit provides support to the CRO and is responsible for overall continuity. A quarterly report on the risk portfolio of the Ayala Group of Companies and the related risk mitigation efforts and initiatives are provided to the Audit Committee. The Company’s internal auditors monitor the compliance with Ayala’s risk management policies in order to ensure that an effective control environment exists within the Ayala Group as a whole.