MISC BERHAD 68 INTEGRATED ANNUAL REPORT 2023 69 www.miscgroup.com STRATEGIC REVIEW SECTION 6 Our Risks and Mitigation Strategies Our Risks and Mitigation Strategies Definition • Increasing cybersecurity threats globally may expose MISC Group to cybersecurity breaches as MISC expands its technology and digital footprint Impact on Value • Disruptions to business and operations • Loss of critical data and information • Potential litigation exposure and financial losses • Major reputational damage and loss of trust among stakeholders Cybersecurity Mitigation Strategies Risk Movements • Strengthen cybersecurity governance by adoption, integration and enforcement of relevant cybersecurity policies, standards and procedures • Conduct cybersecurity assessments to identify potential vulnerabilities and weaknesses • Continuously conduct cybersecurity awareness programmes Definition • Adherence to statutory and regulatory requirements governing the organisation’s operations, including compliance with internationally-accepted standards and best practices for business ethics Impact on Value • Exposure to litigation risks, financial disputes and business disruptions • Negatively impact our reputation, leading to loss of stakeholder and client trust Governance and Integrity Mitigation Strategies • Strengthen adherence to MISC’s Anti-Bribery and Corruption (ABC), CoBE, Economic Sanctions and Export Control, including Competition Law, among others • Ensure critical compliance clauses are incorporated into third-party agreements/contracts • Performance and adherence towards relevant laws and regulations embedded into the overall key performance measurement • Conduct regular assurance activities and training on the laws surrounding ethics and compliance to continuously improve awareness levels Risk Movements Key Capitals Material Matters Human Rights Values, Governance and Business Ethics H Human Capital SR Social & Relationship Capital Asset Availability, Utilisation and Marketability Definition • Under-utilisation and unavailability of assets/vessels due to poor maintenance, operational inefficiency and volatility of freight rates due to cyclical nature of the shipping market • Stiffer competition in the market with newer, technologically advanced and fuel-efficient vessels Impact on Value • Major disruptions to vessel operations may impact revenue due to prolonged off-hire periods • Inability to meet asset performance targets and requirements may impede vessel tradability • Idle assets Mitigation Strategies • Establish and implement effective asset maintenance systems and process plans • Ensure continuous development of highly-skilled and trained personnel to operate assets at optimal levels • Continuously review and monitor vendors’ and third-party service providers’ performance to ensure consistently high standards of practices to drive operations and asset maintenance • Ensure strict adherence to Health, Safety, Quality, Environment and Energy (HSQE-En) and Security Policy Risk Movements Key Capitals Material Matters P Physical Capital F Financial Capital F Financial Capital SR Social & Relationship Capital Financial Performance Health and Safety Security Health and Safety Definition • Exposure to a wide range of health, safety, security and environmental risks Impact on Value • Disruptions to business and operations • Financial and commercial losses due to penalties, clean-up costs and potential loss of clients • Unsafe working environment for personnel/workforce • Major reputational damage to the Group Mitigation Strategies • Strengthen HSSE governance with rigorous policy adoption, integration and enforcement into the Group’s working culture to promote best practices • Implement Generative HSSE Culture Awareness programme • Closely monitor and manage all HSSE-related risks Risk Movements Key Capitals H Human Capital SR Social & Relationship Capital Material Matters Health and Safety Security Ocean Health Key Capitals F Financial Capital Material Matters Cybersecurity Values, Governance and Business Ethics Security Digitalisation Digitalisation Definition • Attracting and retaining talent in the maritime industry remains an ongoing challenge. This includes the difficulty in retaining a strong human capital team, which may impede the development of knowledge and skills aligned to industry demands Impact on Value • Insufficient pool of readily available successors to assume critical positions • High attrition and undeveloped skills impede achievement of business targets and growth Mitigation Strategies Risk Movements • Undertake detailed succession planning and initiatives to ensure a sustainable pipeline of talents • Execute a Contingent Workforce initiative to provide flexibility in talent pool resourcing • Deploy a structured and holistic development process to continuously build employees’ competency and capability levels • Implement a structured Functional Competency and Leadership Competency framework Talent Development and Retention Key Capitals H Human Capital H Human Capital I Intellectual Capital Material Matters Talent Development and Retention Diversity and Inclusion Community Investment Sustainable Supply Chain F Financial Capital F Financial Capital P Physical Capital SR Social & Relationship Capital SR Social & Relationship Capital P Physical Capital
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