Corporate Governance /Risk Management / Corporate Compliance
Challenges (GRI 103-1) (GRI 102-16)
Execution (GRI 103-2) (GRI 102-18) (GRI 102-20) (GRI 102-21) (GRI 102-22)
The Board of Directors is responsible for controlling and overseeing the management of CKPower’s operations to ensure compliance with the law and the organization’s vision and good practices. It is also tasked with carrying out shareholder resolutions with integrity, protecting the Company’s best interests, as well as putting in place a check-and-balance system and ensuring the board’s auditability, while also striving to develop business innovations and taking care of society and the environment. The board structure comprises 12 directors with knowledge and experience that correspond with CKPower’s business strategies. The details are as follows:
a. Governance structure of the organization, including committees of the highest governance body.
b. Committees responsible for decision-making on economic, environmental, and social topics.
Risk Management (GRI 102-29) (GRI 103-30) (GRI 102-31)
CKPower places importance on introducing a risk management system to business operations to ensure the ability to efficiently handle challenges and changes in external factors and enable the Company to conduct business with stability and bring maximum benefits to all stakeholders sustainably. To this end, the Board of Directors has charged the Corporate Governance and Risk Management Committee with the responsibility of reviewing and approving risk management actions, acknowledging the risk management of CKPower and its subsidiaries, prescribing risk management policies, and providing recommendations to the Board of Directors and the Management, effectively overseeing and reviewing risk management, monitoring and assessing the management of key risks that affect the Company’s businesses, as well as acknowledging the risk management plans of the Company and its subsidiaries. The committee is to report issues and obstacles related to key risks and the progress on the resolution of such issues at board meetings on a quarterly basis.
Recognizing the significance of risk management, CKPower formulated a risk management plan for the year of 2020 to serve as guidelines for effective risk management. The risk management working group of the Company and its subsidiaries consists of executives from all lines of work, including business planning, engineering, operations and maintenance, and power plant managers and is responsible for formulating annual risk management plans, subject to risk assessment in the five following aspects:
Risk Management Structure
Risk Management Process
To achieve efficient risk management, a risk management process has been introduced as a tool for identifying, analyzing, and managing potential risks that may affect business operations. CKPower’s risk management process consists of six steps as follows.
- Objective setting
- Risk identification
- Risk assessment
- Risk response
- Control activities
In addition, the risk assessment criteria for CKPower’s risk analysis are based on types and levels of impact and likelihood of such impact and are divided into five levels of risk exposure ranging from from very low to very high. The overall risk level considered to be within the risk appetite/risk tolernace of CKPower is the medium level. For risks that exceed the risk appetite, CKPower will formulate additional mitigation plans to mitigate such risks as well as designate responsible persons and specify completion time.
In 2020, CKPower assesses risks associated with the Company, which can be divided into five categories as follows:
|Risk Type||Risk||Management Plan|
|1. Strategic Risk||In terms of investment risks, CKPower invests in other businesses, with the Company deriving its core revenue from dividend income from the companies invested in by the Company. Should any business in which the Company holds shares be affected by various risks, the operating results will not meet the goal, and the Company will be impossible to pay dividend as expected.||
|2. Operational Risk||With regard to availability risks, CKPower’s goal is to deliver electricity and steam with quality and availability to customers, including various suppliers, taking into consideration the security and stabilization of production of electricity and steam. The Company focuses on management of machinery and equipment, including the development and optimization of the power plants to ensure their round-the-clock availability.||
|3. Financial Risk||With respect to liquidity risks, given the Company’s plans to expand its investment in the business of electricity production and distribution from various types of energy to achieve its operational goals, financial liquidity is of paramount importance to its business operations. As such, it controls and manages its liquidity to ensure that its cash flows are sufficient for its business operations under normal circumstances and can accommodate future investment expansion.||
|4. Compliance Risk||In terms of compliance risks, CKPower and its affiliated companies, which operate in Thailand and the ASEAN region, must comply with applicable rules, regulations, and laws of every country they operate in, as well as monitor changes in such applicable rules, regulations, and laws.||
|5. nvironment and Social Risk||With regard to environmental and social risks, the Company’s power plants may have impact on local communities and the environmental in their vicinity.||
The risk assessment results reveal that the risk in most categories was at an acceptable level or lower, except the environmental and social risk in the areas around CKPower’s power plants, which was found to be at a very high level. CKPower was aware of the outcome and followed its risk management process by formulating a mitigation plan and designating responsible persons to address such risk. In addition, CKPower promotes risk culture within the organization by hosting training sessions on risks to its executives and all employees and communicating the significance of risk awareness internally on a regular basis.
Internal Risk Culture Promotion Activity
Risk Management Training
CKPower organized a knowledge sharing session on risk management to the risk management working group. The session covered corporate risk management, risk management processes, risk assessment criteria, risk management steps and methods, and individuals responsible for risk management in order to allow the participants to review and exchange knowledge on risk management and use the acquired information to develop and optimize CKPower’s risk management. The Company also encouraged officers responsble for risk management to attend online lectures, including Risk Management in a Crisis, Shadow IT (Opportunities and Hidden Threats), Battle with Emerging Risks with SheleadsTech, organized by the Institute of Internal Auditors of Thailand.
Management of Risk from the Coronavirus Disease 2019 (COVID-19) Pandemic
Despite the outbreak of Coronavirus Disease (COVID-19), the Company’s operations, including production and sale of electricity, have not been substantially affected thanks to its power purchase agreements with the Electricity Generating Authority of Thailand, Provincial Electricity Authority, and industrial users across a diverse range of industries. The Company’s risk management with respect to COVID-19 is as follows:
- Establishing a BCP Pandemic Team, responsible for closely monitoring the COVID-19 situation
- Formulating COVID-19 measures and communicating such measures to the staff, suppliers, and contractors of the Company and its affiliated companies working in Thailand and the Lao People’s Democratic Republic for acknowledgment and strict compliance
- Designating the power plant areas as control areas where staff must strictly follow regulations on requests for entry-exit permission, with a security unit responsible for the monitoring of entering and exiting such areas. Each entry into such areas by any third must be approved by the power plant manager and reported to the Managing Director.
- CKPower established guidelines for the 2020 Annual General Meeting of Shareholders in accordance with the government’s new normal policy to reduce and prevent the spread of COVID-19. The duration of the meeting was limited to 1 hour and 30 minutes, with attendance limited to 100 people. Social distancing and mask guidelines were to be observed at all times, and participants were requested to remain seated during the meeting. The Company also suspended the addition of extra seating, and in lieu of microphone use, attendants were asked to write their questions on slips of paper and submit them to the staff. Additionally, checkpoints were set up for the participants to register using the “Thai Chana” platform, prior to both entry and exit, undergo temperature checks, and receive stickers which were to remain on their persons at all time during the meeting. The Company reserved the right to deny entry to anyone exhibiting symptoms of illness, fever (or a body temperature higher than 37.5 degrees Celsius), cough, sore throat, runny nose, difficulty breathing, fatigue, or any other signs of COVID-19 infection in order to prevent the spread of disease and ensure the safety of all attendants and staff. For more information on the measures established by the Company, please click here.
CKPower recognizes the significance of emerging risks that may affect its business operations and sustainability and present either opportunities or obstacles. The Company has been monitoring and keeping track of new risks, so as to be able to identify and analyze key emerging risks that may impact the Company in the next 3-5 years.
CKPower has studied and analyzed key emerging risks that may impact the Company in the next 3-5 years to ensure that it can put in place proactive measures in a timely fashion before such risks can affect its business operations.
Impacts of climate change, such as rising water volumes, rising sea levels, rising temperature, and more severe natural disasters.
- Lower electricity production efficiency, impacting power system stability
- Greater difficulty declaring availability of electricity production due to climate change and varying water levels
- Conducting research studies on water volumes and changes in natural disaster patterns and their impacts on system reliability
- Conducting natural disaster risk assessments and forecasting the severity of climate change impacts on all power plants in details
- Formulating disaster response plans with respect to production, maintenance, equipment, and staff safety
- Improving 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
- Installing 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.
- Introducing upgraded digital systems that allow the entry of a wider range of parameters to achieve more precise electricity cost estimation
Energy technology development, such as the use of renewable energy and energy storage
- 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
- Studying and assessing the capability of operating renewable energy businesses in terms of personnel, budgets, and relevant policies and laws
- Studying and keeping track of renewable energy policies of different countries
- Determining investment goals and expanding towards renewable energy businesses
- Studying and developing technology and price trends of energy storage devices/batteries
Technological changes and digital transformation
- Changes in energy consumption behavior
- Agile business operations in line with technological changes
- Greater vulnerability to cyberattacks, such as data leakages, unauthorized data manipulation, or data theft, due to technology related to data mining, artificial intelligence, and quantum computing
- Optimizing operational efficiency in personnel
- Studying new technologies that affect business operations
- Improving work procedures to accommodate technological shifts
- Adding disaster recovery systems to ensure business continuity
- Keeping track of the development and types of cyberattacks and regularly assessing the effectiveness of the Company’s IT security system and the operating systems of the power plants
Ensuing Compliance with Applicable Laws, Rules, Regulations, and Requirements (GRI 102-17) (GRI 102-25) (GRI 205-2) (GRI 205-3)
CKPower, along with its subsidiaries, promotes compliance with regulations and its code of conduct among directors, executives, and employees at all levels and encourages the Board of Directors and executives to continuously foster the practice and culture across the organization in order to promote adherence to business ethics and codes of conduct related to corporage governance as well as compliance with applicable laws, rules, regulations, and requirements among employees. In addition, all employees and new recruits of CKPower and its subsidiaries are required to undergo business ethics training. CKPower’s code of business conduct is disseminated to all stakeholders across the supply chain on a regular basis through its website.
Furthermore, under the anti-corruption policy, CKPower has announced the introduction of a no-gift practice, in effect since 2019, and notified all stakeholders of the practice through various channels of the organization, such as the website and Facebook page.
In addition, CKPower continued 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.
Corporate Governance Performance in 2020 (GRI 103-3)
|0 complaint of corruption within the organization||0 complaint of corruption from external parties||0 resolved complaint of corruption|
Opinion, Suggestion, and Complaint Management
The Company provides reliable and independent whistleblower channels through which any third parties can report any non-compliance with the codes of conduct, violation of laws, or any suspicious behavior of fraud or misconduct committed by personnel in the Company. Such reports may be submitted to the following designated channels:
- via the Company’s website directly to the Investor Relations at www.ckpower.co.th/th/ir
- via E-mail to the Members of the Audit Committee and the Board of Directors at firstname.lastname@example.org or Investor Relations at email@example.com
- via a sealed letter to the Chairman of the Audit Committee of CK Power Public Company Limited No. 587 Viriyathavorn Building, Sutthisan Winitchai Road, Ratchadaphisek Subdistrict, Dindaeng District, Bangkok 10400
CKPower has put in place whistleblower channels through which a report on any non-compliance with the codes of conduct, any illegal acts or any suspected dishonest acts or misconduct committed by personnel in the Company and its subsidiaries, as well as any flaws in the internal control system, can be filed by both staff and other stakeholders. In addition, a whistleblower protection mechanism has also been instituted. The whistleblower guidelines are as follows:
- Whistleblowing: The Company has arranged for three whistleblower channels through which a whistleblower report can be filed with the executives and the Board of Directors, as follows:
- Implementation: The executives and the Board of Directors have assigned the Audit Committee to collect information, review and investigate facts, and determine suitable methods for dealing with each case. The Audit Committee is to track the progress and outcome periodically.
- Reporting of results: The Company Secretary, executives, or Audit Committee Members shall report findings to the Board of Directors for acknowledgement, to be further reported to stakeholders.
|Received and resolved complaints||0||0||0|
|Received and processed tip-offs||0||0||0|
In addition, CKPower has prescribed whistleblower protection measures and confidentiality policy, the details of which appear under stakeholder engagement guidelines published on the Company’s website along with the whistleblower channels. Access to complaints and tip-offs is restricted to only relevant individuals in order to foster confidence and a sense of security to the complainant.
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.Read more: