Enterprise Risk Management
Enterprise Risk Management ("ERM") is integral to the business and culture of BHG Retail REIT. Through a formalised framework that informs the decision-making of all staff, ERM not only preserves, but enhances value.
The Board of Directors ("Board") is responsible for the overall risk strategy and risk governance of BHG Retail REIT. It achieves this through the approval of the REIT's risk appetite and the implementation of sound risk management and internal control practices. The Board is supported by the Audit and Risk Committee ("ARC") in these matters.
In working within the implemented ERM Framework, the Manager is empowered with a sound structure for BHG Retail REIT to capitalise on opportunities and achieve its investment objectives in a measured manner. This allows the Manager to take prudent risks in line with the approved risk appetite.
The ERM Framework was built on the premise that BHG Retail REIT would have in place a standard and consistent approach to risk management in its culture and strategic planning processes. This would support the setting of priorities and making of decisions at the portfolio and Manager level.
Further, the ERM Framework applies a systematic approach to effectively manage and control risks in the Manager's governance and operations so as to achieve optimal outcome for all its operations, business ventures, collaborations and partnerships.
Following the listing of the REIT in December 2015, it was determined that the ERM Framework would be reviewed every two years. In the event of changes in regulations, country of operations, nature of business or any other event which would affect the REIT and the Manager, the Framework would be reviewed accordingly and updated immediately.
The Board and Manager have worked closely with input from Deloitte & Touche Enterprise Risk Services Pte Ltd ("Deloitte") in ensuring that the ERM Framework remains relevant and proceeds in accordance with current regulatory practices and requirements.
Further, the ERM Framework is supplemented by an outsourced Internal Audit function, which measures and evaluates the effectiveness of the procedures in place under the Framework.
In addition, the Manager has established a semi-annual Control Self-Assessment ("CSA") exercise that is undertaken by the Manager and its subsidiaries. The CSA serves as a monitoring mechanism for management, as individual risk owners are required to assess the effectiveness of existing risk management and controls processes.