RISK MANAGEMENT OPERATIONAL & COMPLIANCE RISK The Group’s operations are exposed to a variety of operational risks relating to project management, environment, health and safety (EHS), human capital, data privacy, legal and compliance management. Project Management Though minimal risk has been encountered, the Group remains vigilant against project risks such as schedule delay, cost overrun, build quality, contractor’s capability and performance, as well as contract disputes, that will affect our reputation and sales. We manage this risk by: a) Allocating appropriate attention to technically challenging and high-value projects. b) Adopting a systematic assessment and monitoring process to identify and manage the key risks for each project. The Group adopts a rigorous project management process to ensure that project cost, build quality and time objectives are met and have put in place stringent pre-qualification and tendering procedures to appoint well-qualified vendors. Regular site visits are also conducted to closely monitor the progress of projects and manage potential risks of delays, poor workmanship and cost overruns. c) Benchmarking our quality assurance processes against industry standards. We voluntarily subscribe to the BCA Construction Quality Assessment System (CONQUAS) and the Quality Mark (QM) Assessment System. We identify opportunities and improvements by: • Adopting robust project management practices that ensure seamless compliance with local laws and standards. • Focusing on sustainability and green building practices to meet the growing demand for eco-friendly properties, while also strengthening brand reputation. Environment, Health and Safety (EHS) The Group is committed to be a socially and environmentally responsible organisation that advocates for a ‘Safe and Green’ corporate culture. In this regard, it is paramount that the Group maintains high environment, health and safety standards across the Group. We manage this risk by: a) Maintaining our longstanding commitment to EHS, exemplified by our Board of Directors, ExCo and Senior Management since the implementation of the CDL EHS Policy in 2003. b) Establishing an EHS Executive Committee comprising Group COO, Group GM, Group CFO, Senior Management representatives and relevant key executives across the business units to ensure workers are engaged, resources are adequately allocated to EHS, and EHS performance is regularly monitored. c) Maintaining an integrated ISO 14001 and ISO 45001 Environmental, Health and Safety Management System (EHSMS) across all key operations in Singapore, to manage the environmental impact of our operations and the safety, health and wellbeing of employees, workers, homebuyers, tenants and building users. Where possible, our hotels also align their policies and procedures with the requirements of best practice accredited systems. d) Implementing an EHS internal audit system to ensure that its integrated EHSMS are in compliance with ISO 14001 and ISO 45001 standards. e) Monitoring contractors’ onsite EHS performance through an independent audit tool – CDL 5-Star EHS Assessment System. f) Maintaining robust EHS practices for our managed assets to provide a safe, conducive and eco-friendly environment for building users. We identify opportunities and improvements by: • Enhancing a positive reputation and building a strong track record as a competitive advantage for the Group. CORPORATE GOVERNANCE CITY DEVELOPMENTS LIMITED 40
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