Risk Management
The Company considers effective risk management and mitigation to be integral to our business operations. We encourage employees to have a positive attitude to risk and to understand the risks that are inherent in our business. As well as having the right tools and processes, effective risk taking requires the right culture and behaviours across our businesses.
Our risk management culture and processes meet world-class standards.
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Thai Union Group has been ranked number one in the world in the food industry on the Dow Jones Sustainability Indices (DJSI) 2022. The company has now been listed for nine consecutive years on the DJSI. Our world-class standards for Risk and Crisis Management received a score in the 100th percentile for the third straight year.
RISK MANAGEMENT CULTURE
The Company continues to embed risk culture through all levels of the business. Starting from the Companys Board of Directors (BoD), Risk Management Committee (RMC) and leaders promote and enforce consistent and effective risk management, making it part of our organizational culture. The policy, framework, guidelines and structure of risk management demonstrate formal communication.
BoD including executive and non-executive directors, RMC and leaders monitor, assess and are trained regularly on Group-wide Risk Management, key risks and emerging risks.
Employees are encouraged to have a positive attitude towards proper risk management from their first day with Thai Union. This is consistently reinforced throughout their time with the organization, such as through the new joiner program, risk management training, ongoing activities and internal news updates.
In addition, risk management is embedded in business planning, decision and execution. Examples of key areas include:
- Strategic risks are considered in the strategy planning process and during the implementation of initiatives complying with the decided strategy.
- New strategic investments, including M&A, new types of business investment, and large capital expenditure are embedded in risk management. The risk profile will be reviewed by the Risk Management Committee (RMC) for suggestions on the adequacy and appropriateness of the risk response.
- Financial strategy and risks were taken care of closely and driven by Group Treasury and the Finance Shared Services function and comply with Group Financial Risk Management and Treasury Policy.
The framework parameters and the acceptable risks are approved by the BoD and used as the key communication and control tools for the management and treasury team,globally. - Sustainable strategy and risk management were taken care of closely and driven by the Sustainable Development Committee lead by the President and CEO as the Chairman of the Committee.
- IT security strategy and risk management were taken care of closely and driven by the IT Security Committee lead by the President and CEO as the Chairman of the Committee.
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Risk Management Framework
The Company’s risk management framework is in accordance with the international standards of COSO ERM. It is a guideline for management and employees to operate consistently. The framework is designed to identify, assess, manage, monitor and communicate systematically and consistently in order to minimize the probability of risks occurring and limit their potential impact on Company business. Thai Union Group processes risk management at a Group level, business segment level, and entity level. Hence, the quarterly risk exposure review is conducted with entity risk coordinator, risk owner and Risk Management Committee (RMC). In the meantime, RMC quarterly reports significant risks, mitigations, and improvements to the Board of Director.
Acceptable Risk Level
Acceptable risk level is an important factor to consider when Thai Union Group sets strategies and determines the direction of risk management. High and Medium-High are considered to exceed the acceptable level and require the immediate actions or mitigation plans. Below are the examples of Thai Union Group’s acceptable risk level:
Health & Safety:
- We are not willing to accept any permanent disability or death from work-related injuries. We will ensure the safety of everyone at our sites around the world.
Business Interruption (Plant):
- We are not willing to accept any incidents causing unplanned plant shutdowns and impact daily plant capacity. We will strive to reduce likelihood and impact of the incidents impact more than 1 day
Anti-Bribery and Corruption:
- We have zero-tolerance towards bribery and corruption and comply with the anti-bribery and corruption laws everywhere it does business.
KEY RISK FACTOR AND EMERGING RISK
Thai Union Group is a global seafood processing company and its operating and financial results are subject to a variety of risks inherent in the seafood industry. The Company can prepare for many of the risks to mitigate any impact and/or minimize likelihood, however many of them are not within our control and could materially impact the Company’s operations, financial position or reputation.
The above risk radar provides an overview of key business risk factors and emerging risks to Thai Union Group at the end of 2022 and risk level evolution compared to 2021. To ensure the emerging risk is within the company radar, Thai Union Group conducts the annual risk assessment workshop with Global Leadership Team (GLT). The inside-out and outside-in environment from global risk survey is incorporated in the workshop assumption to illustrate long-term risks that can implead the company’s strategy and business objectives.
In addition to the risk radar, Thai Union Group aware of the most severe emerging risks on a global scale over the long-term such as climate action failure, extreme weather, biodiversity loss, employment crises, social cohesion erosion, livelihood crises, infectious diseases, human environmental damage, natural resource crises, debt crises, and geoeconomic confrontation. Those emerging risks are incorporated in the annual risk assessment workshop with GLT in order to ensure the emerging risks are assessed and captured at the early stage.
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