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Risk Management Areas and Operation Mechanism

Enterprise Risk Management Areas 

The Enterprise Risk Management Committee consolidates risks in the areas of strategy, operation, finance and hazard.

 

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Enterprise Risk Management Operation Mechanism

For above areas, evaluates the possibility of their occurrence and the severity of their impact on the company (the impact assessment includes finance, operations, personnel, and company reputation), draws a risk map, and defines the priority order and risk level of risk items. After balancing reasonable risks and preventive costs that the enterprise can sustain, the risk management plans are drawn up and adopted. The committee periodically reviews possibility and severity of risks for changes over time to monitor the effectiveness of risk management plans and related control operations. At the same time, we also grasp the opportunities that may accompany risks.

 

 

 

 

Key Risks Identification and Countermeasures

UMC targets strategic, operational, financial, and hazard risk areas, identifies key risks and formulates countermeasures, including environment, social, corporate governance and emerging global risks related to the company's operations. For detailed response measures, please refer to 2021 Sustainability Report Chapter 1-2 Implementing Risk Management.

 

Operating Situation:

The company has actively promoted and implemented the risk management mechanism since 2018, and began reporting its operations to the Nominating Committee and the Board of Directors at least once a year in 2020.

 

  • The Enterprise Risk Management Committee submitted the company’s risk management policies, mechanism, procedures, scope, and organizational structure to the Nominating Committee and the Board of Directors, and received approval in February 2020. In addition, the Committee developed the "Enterprise Risk Management Manual" standards in 2020 as the guideline for all employees to implement risk management.
  • The Enterprise Risk Committee has reported risk management relevant affairs to the ESG Steering Committee quarterly since 2021. On October 27, 2021, the Enterprise Risk Management Committee submitted its report on major risks related to strategy, operations, finances, and hazards; countermeasures; and results of risk management implementation. The report also took into account environmental, social, and corporate governance risks. Approval was obtained from the Nominating Committee and Board of Directors through the ESG Steering Committee. Major risks, including the COVID-19 pandemic and US-China conflict, have been properly managed and have not significantly affected the Company’s operations and investment activities. Developments related to these risks will continue to be monitored.
  • On March 18, 2021, the Enterprise Risk Management Committee, in cooperation with external consultants, held a high-level forum on risk management to improve the risk perception sensitivity of senior managers and management techniques.