Corporate Governance /Risk Management / Corporate Compliance

Challenges

CKPower recognizes that corporate governance forms the foundation of efficient and sustainable business operations and thus realizes that clear guidelines must be established to ensure transparency and accountability

while also taking into consideration all stakeholders and compliance to laws and regulations relevant to business operations, as a demonstration of the company’s responsibility and intent to conduct business ethically and combat all forms of corruption, which may undermine the confidence of stakeholders and investors towards the organization. At the same time, the company has also prescribed corporate risk management processes in preparation for potential risks and changes in the future.

Execution

The Board of Directors is responsible for overseeing and managing the company’s business operations to ensure compliance with the law, vision, and good practices of the company as well as for executing resolutions passed by shareholders with integrity to protect the interests of the company. The Board of Directors is also subject to checks and balances, and its activities are subject to auditing. Structurally, the Board of Directors consists of a total of 12 qualified members with knowledge and experience consistent with the company’s business strategies, as detailed below.

Balanced structure of the board

Board of directors	Number (person)
Executive directors	1
Non-executive directors	11
Independent directors	4

Board of directors	Number (person)	Percent
Male	1	9
Female	11	81
Total	12	100

The company has also assigned director selection to the Nomination and Remuneration Committee, for which it is tasked with reviewing candidates with diverse qualifications, such as professional skills and specialized expertise, without any discrimination against age, gender, nationality, religion, and physical impairment, as well as their suitability for a position on the Board of Directors or sub-committees to ensure alignment with corporate strategies and promote the sustainable growth of the business.

Risk Management

CKPower stresses the importance of applying risk management to business operations to achieve security and bring benefits to all stakeholders sustainably. To this end, the Board of Directors has assigned the Corporate Governance and Risk Management Committee to oversee and review efficient risk management of the company and its subsidiaries as well as monitor significant risks that may affect the company’s business. The Risk Sub-committee of the company and its subsidiaries consists of executives from all lines of work, including business planning, engineering, operation and maintenance, and plant managers, and is responsible for formulating annual risk management plans based on the assessment of the five following risk areas:

The Risk Sub-committee considers various risks, analyzes potential impacts and opportunities, and determines risk appetite or risk tolerance, risk indicators, risk management measures. The sub-committee is required to report risk management results every three months so as to ensure that the risk management measures are regularly assessed and effectively keep risk levels within the risk appetite. The company has also assigned the internal audit unit, which works independently from the Risk Sub-committee, to monitor and review the company’s risk management processes, and appointed a knowledgeable and capable candidate as the secretary to the Corporate Governance and Risk Management Committee, responsible for compiling data and presenting risk management reports to the Corporate Governance and Risk Management Committee, which then submits such reports to the Board of Directors for approval.

Risk management structure

Emerging risks

The company recognizes emerging risks that may affect the company’s business operations and sustainability in terms of opportunities and obstacles. The following issues have been identified and analyzed as key emerging risks that may impact the company in the next 5-10 years.

Future risks

The company recognizes emerging risks that may affect the company’s business operations and sustainability in terms of opportunities and obstacles. The following issues have been identified and analyzed as key new risks that may impact the company in the next 5-10 years.

Risks

Impacts of climate change include water volumes, higher sea levels, higher temperature levels, and more severe natural disasters.

Potential impacts

The production efficiency may be decreased, in turn impacting system reliability.
The declaration of electricity charges is more difficult due to climate change and varying water levels.

Risk management

Conduct research studies on water volumes and changes in natural disaster patterns and their impacts on system reliability
Conduct natural disaster risk assessments and forecast the severity of climate change impacts on all power plants in details
Formulate disaster response plans with respect to production, maintenance, equipment, and staff safety
Improve power plants’ ability to withstand natural disasters or unusual weather patterns, such as by elevating power plants to prevent floods, utilizing machinery that can withstand extreme heat/cold, and flood-proofing power plant infrastructure through design
Install reservoir monitoring equipment and real-time, web-based monitoring systems to ensure that once the commercial operation has begun, the structures of the power plants are continuously monitored through proactive measures by teams of engineers and experts.

Risks

Energy technology development, such as the use of renewable energy and energy storage

Potential impacts

Changes in energy consumption behavior
Potential changes in power production business models
Changes in relevant policies and laws for system reliability
Potential cost-dependent changes in the electricity tariff structure

Risk management

Study and assess the capability of operating renewable energy businesses in terms of personnel, budgets, and relevant policies and laws
Study and keep abreast of renewable energy policies of different countries
Determine investment goals and expand towards renewable energy businesses
Study and develop technology and price trends of energy storage devices/batteries

Risks

Technological changes and digital transformation

Potential impacts

Changes in energy consumption behavior
Agile business operations in line with technological changes

Risk management

Enhance operational efficiency in personnel
Study new technologies that affect business operations
Improve work procedures to accommodate technological shifts

Compliance

CKPower, along with its subsidiaries, promotes compliance with regulations and the company’s code of conduct among directors, executives, and employees at all levels and encourages the Board of Directors and executives to continuously reinforce the practice and culture across the organization in order to promote business ethics among employees. In 2019, under the anti-corruption policy, the company announced the introduction of a no-gift practice and notified all stakeholders of the practice through various channels of the organization, such as the website and Facebook page. In addition, the company intends to elevate the no-gift practice into an official policy of the organization in 2020 to demonstrate its intent and commitment to internal management under the approach of zero tolerance against corruption.

Tax action

To ensure that the company and its subsidiaries operate in accordance with the principle of good corporate governance and a code of business conduct that corresponds with sustainability practices, CKPower has placed emphasis on legal compliance, transparency, and accountability with regard to tax management and fulfilled its duties under its tax policy by paying taxes correctly in order to foster public confidence in the organization.