Enterprise Risk Management

We strive to cultivate an organizational structure that supports strong corporate governance, clearly defines risk-taking responsibility and authority, facilitates ownership and accountability for risk-taking, and ensures the proper segregation of duties.

We strive to sustain the sound processes that facilitate the identification, assessment, quantification, mitigation, management, monitoring, and communication of risks at the enterprise and operational level. We also regularly review our RM processes and policies on a continuing basis, and stay abreast of current developments to ensure that we remain robust and relevant, through benchmarking against industry and global best practices.

We strive to nurture a risk-aware culture by setting the appropriate tone at the top, defining clear accountability for risks, espousing transparency and timeliness in sharing risk information, enabling risk-adjusted decisions, recognizing appropriate risk-taking attitudes, and embedding the right risk skills across the organization.

The Board of Directors oversees and conducts an annual review of Globe’s material controls, covering operational, financial, and compliance areas and overall RM systems. The overall responsibility for RM oversight rests with the Board. To enable the Board to effectively discharge Globe’s RM function, various Board committees have been designated to provide RM oversight for specific risk areas.

A Board Risk Oversight Committee (BROC) was created in 2Q 2019 to provide focus and effectively consolidate the decentralized and overlapping risk oversight duties performed by various Board sub-committees. The establishment of the BROC will ensure an integrated and holistic oversight on RM at the Board level. 

The BROC is mandated to assist the Board in fulfilling its oversight responsibilities in relation to Risk Governance in Globe. This ensures that the Board and Globe’s Management will be able to make well-informed and intelligent decisions based on thorough assessment of risks and opportunities. This includes:

• Ensuring that there is an effective, efficient, and integrated risk management process working in place.

• Enabling the identification, analysis, and assessment of key risk exposures its impact to Globe’s strategic and business objectives, as well as the formulation of an effective RM strategy.

• Cultivating a sound organizational structure with an effective Enterprise Risk Management (ERM) framework working in place.

• Establishing clear definition of risk-taking authority, ownership, accountability, and proper segregation of duties.

• Fostering a risk-aware culture that is pervasive throughout Globe, and ensure transparency in reporting of key risks to relevant stakeholders.

The BROC is led by a Chairperson who must be an independent, non-executive director.  At present, it is composed of four (4) directors, three (3) of which are independent, non-executive directors. The Board appoints all members of the committee. 

The BROC meets on a quarterly basis or as frequently as needed. The BROC also submits and presents a report to the Board at least two (2) times a year containing updates on all actions initiated by the committee at the board meeting following the BROC meetings, as well as a year-end report outlining the committee’s actions for the year, confirmation of how its responsibilities were discharged, the assessment performed on the effectiveness of the committee, and recommendations for improvement.

The BROC has the following roles and responsibilities:

• Develop a formal Enterprise Risk Management Framework.

• Provide oversight on Globe’s activities in identifying and managing key enterprise-wide and operational risks (but not limited to): Strategy, Technology, Financial, Credit, Market, Information/Cybersecurity, Data Privacy, Business Disruption, Legal, Regulatory, Fraud, Customer Experience, and other risk areas.

• Through the Enterprise Risk Management Department, exercise oversight and guidance over Globe’s risk management and governance structure.

• Review and approve the annual work plan (i.e., activities and initiatives such as risk assessments, risk embedding programs, etc.) of the ERM Department, based on the priorities and direction of the company, and ensure that it remains relevant, comprehensive, and effective.

• Review disclosures regarding risks and risk management contained in Globe’s Annual Integrated Report and other publicly issued reports and statements as applicable.

• Ensure alignment, on a regular basis, with other assurance providers of Globe on critical risks and control identification and assessment.

• Secure independent expert advice on RM matters where considered necessary or desirable.

With guidance provided by the Board, our Management is fully responsible for decision-making over the day-to-day affairs of Globe. These cover the design, development, and implementation of the RM strategies, policies and systems intended to address the identified risks.

The Chief Finance Officer (CFO) and concurrent Chief Risk Officer (CRO) supports the CRE at the management level. The CRO ensures that:

• There is adequate supervision and guidance over the development, implementation, maintenance, and continuous improvement of RM policies, processes, and documentation.

• Risk Management processes and activities are embedded within the organization’s policies, business cycles, and operational decisions.

• Responsibilities for managing specific risks by Senior Management are clear.

• The level of risk accepted by the company is appropriate.

• An effective control environment exists for the company as a whole.

• In collaboration with the CEO/CRE and Senior Management, the BROC and the Board, and other Stakeholders are provided periodic information on the results of the annual risk assessment exercise and updates on the status of top risks, key risk mitigation activities, key risk and performance indicators and emerging risks that could impact the attainment of Globe’s objectives.

On a quarterly basis, the Board, through the BROC is appraised on the company’s critical risks, control issues, and key mitigation plans by the CRO. Insights on the following are provided:

• Risk management processes are working as intended,

• Risk measures and mitigation plans are reported and continuously reviewed by risk owners for effectiveness; and

• Established risk policies and procedures are being complied with.

Outside the quarterly scheduled BROC Meetings, the CRO and the Enterprise Risk Management Department provides regular updates to the BROC Chairwoman via executive sessions, on the status of key risks, management’s risk action plans and strategies and new or emerging risks needing immediate attention.

The Enterprise Risk Management Department (ERMD) supports the CRO in undertaking her role. Key functions of the ERMD include:

• Facilitating Management Team’s annual risk assessment exercise and reporting the results thereof.

• Coordinating with risk owners to gather information and updates on Risk, the status of and its management/mitigation activities

• Facilitating the execution of Line Management’s risk assessment exercise 

• Developing and implementing risk culture-building programs to drive and embed the RM discipline across the organization

• Serve as the BROC secretariat to support the discharge of the BROC’s risk oversight functions.

• Enable the BROC to effectively exercise oversight and guidance over Globe’s risk management and governance structure at the operating level.

The Internal Audit Team provides independent assurance on the effectiveness of RM systems and processes. Internal Audit’s examinations cover a regular evaluation of adequacy and effectiveness of RM and control processes encompassing the company’s governance, operations, information systems, reliability and integrity of financial and operational information, effectiveness, and efficiency of operations, safeguarding of assets and compliance with laws, rules, and regulations.

The Risk Owner has overall accountability for the assigned risk/s and is granted authority to enable the effective management of a particular risk.  His function also includes:

• Understanding the risks and determining their drivers,

• Planning for and executing appropriate RM strategies and mitigation plans for key risks identified, including the adoption of the necessary RM framework/s and standard/s.

• Securing required resources needed to effectively manage the risks,

• Monitoring and reviewing the level of risk exposures and continuing relevance of RM strategies and plans, and

• Providing timely updates on the status of RM activities to concerned stakeholders.