Chapter 1 General Provisions |
| Article 1 | (Purpose of enactment)
These principles are enacted by the Taiwan Stock Exchange Corporation and Taipei Exchange jointly to assist Taiwan Stock Exchange (TWSE) and Taipei Exchange (TPEx) listed companies in establishing a sound risk management system and ensure their sound business operations toward sustainability.
It is advisable for TWSE and TPEx listed companies to refer to the relevant provisions of these principles in establishment their own risk management policy and procedures in order to strength their risk management systems.
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| Article 2 | (Objective of enterprise risk management)
The objectives of enterprise risk management are to manage through a sound risk management structure various types of risks which may affect an enterprise's accomplishment of objectives and to incorporate risk management in operating activities and the day-to-day management routine for the following purposes:
- realization of enterprise objectives;
- enhancement of management efficiency;
- provision of reliable information;
- effective allocation of resources.
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| Article 3 | (Enterprise risk management principles)
It is advisable for a TWSE or TPEx listed company to follow the principles below in its establishment of a risk management system:
- Integration: to include risk management as a part of all activities.
- Structure and comprehensiveness: to promote risk management in a structured and comprehensive manner to obtain consistent and comparative results.
- Customization: to devise an appropriate risk management framework and process based on the environment, scale, business features, nature of risk, and operating activities of the enterprise.
- Accommodation: taking into account the needs and expectations of stakeholders, to enhance and fulfill their understanding of and expectations for enterprise risk management.
- Development: to project, monitor, familiarize itself with, and respond to changes in the internal and external environment of the enterprise appropriately and promptly.
- Effective information use: to rely on historical and current information as well as future trends inits risk management development and provide such information to stakeholders promptly and clearly for reference.
- Personnel and culture: to increase the level of importance attached by the governance and management units to risk management, increase the overall risk awareness of the enterprise through a sound risk management training mechanism across the board, and treat risk management as part of corporate governance and day-to-day operations.
- Constant improvement: improve risk management and related operating procedures constantly through learning and experience.
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| Article 4 | (Establishment of risk management policy and procedures)
A TWSE or TPEx listed company shall, taking into consideration the overall scale, business features, risk nature, and operating activities of the company and its subsidiaries, establish applicable risk management policy and procedures covering the following at the minimum:
- objectivesof risk management;
- risk governance and culture;
- organization structure and dutiesof risk management;
- risk management procedures;
- risk reporting and disclosure.
The above risk management policy and procedures are subject to review at any time subject to changes in the internal and external environments of the company to ensure the design and implementation of the system remain effective.
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| Article 5 | (Review and enforcement of risk management policy and procedures)
The risk management policy and procedures established by a company are subject to review by the risk governance unit appointed by the company and approval from the board of directors before implementation.
The policy and procedures shall be disclosed on the company website or Market Observation Post System.
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