Risk Management

Risk Management is an important cornerstone of CAO's businesses. CAO has built a strong and effective foundation of risk management infrastructure, having continued to reinforce our risk management culture through our business philosophy of “Compliance as a Top Priority, Risk Management as Utmost Importance”.

The Group’s four-tier management and control structure is designed to ensure sound governance and oversight over the execution of effective risk management practices for the Group.

At the strategy and governance level, the responsibility for the effective risk management of CAO lies with the Board of Directors. All risk management related issues will be ultimately reported to the Board of Directors.

At the tactical and policy level, the Risk Management Committee (“RMC”) has oversight over key risk management issues. The RMC reviews limits for various types of risks and proposes it to the Board for approval. In addition, the RMC will review and approve business plans and new activities that CAO plans to embark on. Through monthly reports and quarterly meetings, the RMC is updated on the various risk metrics as well as CAO’s risk exposures and the manageability of each category of risk.

At the management and control level, the Company Risk Meeting (“CRM”) plans and implements risk management controls over risk exposures such as market, credit, operational, enterprise, compliance and reputational risks. The CRM operates within the delegated authority set at the RMC level. The CRM is chaired by the Head of Risk Management, who reports to the CEO but has an independent direct reporting line to the RMC. 

At the operation level, the Risk Management Department ensures that risk management activities are executed daily and that all risk-related policies, processes and limits are implemented and adhered to. The Risk Management Department has established a comprehensive risk management framework to provide greater efficiency in identifying, reporting and monitoring the risk profiles of the Group’s supply and trading businesses in Singapore, Hong Kong SAR, Los Angeles and London. The Group’s newly expanded risk management team, with professional credentials such as Financial Risk Manager by Global Association of Risk Professionals and their expertise in credit, market and enterprise risk management, manages and supports appropriate risk management practices in daily operations across the globe, enabling the management team to execute and achieve strategic business objectives.

CAO’S ROBUST RISK MANAGEMENT AND CONTROL STRUCTURE