Gudeng's risk management policy is to establish a comprehensive risk management goal, through appropriate organizational planning, and then plan and manage with vertical departmental goals, plus horizontal departmental links,to achieve a point, line, and surface risk management network; To ensure that the overall goals of Gudeng can be implemented, and at the same time to recognize and control possible risks.
Limitations
Although enterprise risk management has significant benefits, limitations still exist. Restrictions may come from human errors in the decision process, risk response and decision-making control to consider costs and benefits, simple human errors or failures caused by breakdown, multi-person collusion, deliberate fraud, and the high-level management beyond the internal control system... etc. These restrictions cannot guarantee that corporate risks can be completely eliminated.
Risk Management Scope
Gudeng integrates and manages all potential risks such as various strategies, operations and finances that may affect operations and profitability through methods such as risk enumeration, identification and analysis.At the same time, it evaluates the frequency of risk events and the severity of the impact on Gudeng’s operations, and defines the priority and level of risk, and adopts the corresponding risk management strategy according to the risk level.Gudeng's risk management policy includes the management of "strategic trend risk", "operational risk", "financial risk", "information security risk", etc
Risk Management Organization Structure
1. The chief executive officer is the top risk management officer. The general manager, chief operating officer, and department supervisors serve as front-line risk management personnel to detect, identify, evaluate and formulate relevant countermeasures for various risks, and regularly review and supervise at operating meetings.
2. For different risks, the CEO sets up relevant response teams based on different events, and assigns related department supervisors to coordinate the response.
3. In the part of the internal control system, the audit unit is responsible for the implementation of the audit.
Risk Management Policies and Procedures
Gudeng's board of directors passed on November 06, 2020 to formulate a "risk management policy" as the highest guiding principle of Gudeng's risk management. Gudeng regularly assesses risks, and formulates risk management policies for each risk,covering management objectives, organizational structure, ownership of rights and responsibilities, and risk management procedures and other mechanisms and implements them to effectively identify, measure and control Gudeng’s various risks , controlling the risk within an acceptable range.
"Hazard risk"
Refers to the risk of company losses caused by major natural or man-made disasters (such as earthquakes, fires or chemical spills and epidemics).
"Strategic Risk"
Risks of loss due to errors in business strategies, such as excessive concentration of sales areas, excessive concentration of customers, and corporate mergers and acquisitions.
"Operational Risks"
Refers to the risk that uncertain factors in Gudeng's production and operation process affect Gudeng's normal operations, such as operational risks (factors such as material shortages or improper production schedules), product quality risks, and information system risks.
"Financial risk"
Due to factors such as domestic and foreign economic and industrial changes, Gudeng's finances and business will be affected, such as interest rate, exchange rate, liquidity and credit risks.
"Compliance Risk/Contract Risk"
Compliance risk refers to the possible loss caused by failure to comply with the relevant regulations of the competent authority. Contract risk means that the signed contract itself has no legal effect, ultra vires behavior, omission of clauses, improper specification, etc., which make the contract invalid and cause possible losses.
"Other risks"
Operating situation
November 2020:
The board of directors passed the "Risk Management Policy."
December 2020:
Complete various operation risk detection, conduct knowledge, evaluate and formulate relevant countermeasures.
December 2020:
The top head of the risk management organization (CEO of Gudeng) reported to the board of directors on the risk environment and the risk control measures adopted and the operation of risk management on December 25, 2020.
The human resources department established an "Operational Risk Introduction Course", which was promoted at Gudeng's monthly meeting in December. It is also listed as a compulsory course for new recruits. The number of trainees is 15 people and a total of 15 hours.
In response to the vigorous development of the global semiconductor industry, Gudeng is actively deploying a globalization policy, and simultaneously strengthening the implementation of the risk management mechanism, and setting up dedicated personnel to supervise the department.
