Risk Management Framework and System
Hwang Chang Construction regards risk management as a key foundation of corporate governance and has established Risk Management Policies and Procedures. The Board of Directors holds overall supervisory responsibility.
A Risk Management Committee, established under the Board of Directors, is chaired by the General Manager and composed of cross-functional heads, and is responsible for policy development, risk identification, prioritization, and periodic review.
Business units (such as the Engineering Division and Marine Equipment Fleet) act as the first line of defense by implementing daily risk management, while the Audit Department provides independent assurance and improvement recommendations to enhance the effectiveness of the risk management system.
Risk Management Process
The Company has established a comprehensive risk management process, beginning with building risk awareness at the grassroots level and progressively covering risk identification, assessment, response, monitoring, and reporting. Each unit conducts a quarterly inventory of potential risks and assesses their materiality based on impact and likelihood, using this to prioritize management focus. For material risks, the Risk Management Committee integrates them into the Company's internal control system and contingency planning, incorporating them into daily operations, and continues to monitor implementation and improvement as a reference for future policy and resource allocation.
Continuous Monitoring and Improvement
The Company conducts risk identification and consolidation at least once a year, with the Risk Management Committee reporting the results to the Board of Directors as a basis for adjusting operational strategy and risk control measures. The Internal Audit Office also plans its audit focus based on the ranking of material risks, enhancing the overall effectiveness of risk control. Through an institutionalized and systematic management process, Hwang Chang is committed to identifying and appropriately responding to various potential risks at an early stage, ensuring stable operations and the long-term sustainable development of the organization.
Risk Identification Results
| Risk Type |
Risk Analysis |
Preventive Measures |
| Occupational Safety Risk |
Worker health and heat stress risks in outdoor construction environments. |
1.1 Contracted on-site physicians and dedicated occupational health nurses provide on-site health services, health guidance, and health tracking management.
1.2 Implementation of ISO 45001 and CNS 45001 occupational safety and health management systems; written risk assessment documentation and briefings are submitted before construction begins, with a risk assessment review meeting convened by the Company.
2.1 Emergency response management uses the heat hazard prevention app developed by the Occupational Safety and Health Administration to measure risk levels for high-temperature outdoor work, with management measures implemented per the app.
2.2 Provision of adequate drinking water and electrolytes.
2.3 Self-inspections for high-temperature outdoor work. |
| Environmental Risk |
Air, noise, dust, wastewater, and construction waste impacts. |
1. Prevention of surrounding environmental pollution through the Environmental Policy and 6S Environmental Management Plan, with hazard warning signs posted at work sites.
2. Reduction of air pollution and wastewater discharge using low-noise machinery, bare soil covering, ground watering, and waste reduction/recycling.
3. Installation of environmental monitoring information panels for continuous noise and air quality monitoring.
4. Monthly inspections to effectively control construction site environmental quality. |
| Financial Risk |
Construction spending leverage is closely tied to central bank interest rate adjustments. |
1. Regular tracking of payment progress at each construction site for effective financial planning and capital utilization.
2. Management of bank credit lines and monitoring of interest rate changes to reduce financing costs. |
| Operational Risk |
Market changes affecting project costs and operations. |
1. The Company has established a corporate governance unit responsible for overseeing corporate governance matters, safeguarding shareholder rights, and strengthening Board functions.
2. The Company has established an internal audit system to verify that corporate governance activities are conducted in compliance with regulations.
3. Material and time-sensitive information is disclosed via the Market Observation Post System (MOPS) and the Company website, ensuring stakeholders receive timely access to important company information. |
| Supply Chain Risk |
Insufficient or excess production capacity may result in an inability to ship or lead to excess inventory and increased costs |
Raw material suppliers are important business partners of Hwang Chang. Amid continuously rising international construction material costs, the Company implements the following three measures to stay abreast of market changes:
1. Closely monitor market trends to track supply-demand changes.
2. Share the latest market developments internally and report related matters at relevant meetings.
3. Hold regular and ad hoc meetings and interactions with suppliers to communicate on product quality, delivery timelines, and other matters. |
