regulations. Pelindo is also committed to continuously improving the Good Corporate Governance (GCG) implementation every year. Pelindo believes that the element of transparency in the work environment and work processes, in accordance with the predetermined goals and mechanisms, will help the Company move forward.Therefore, GCG implementation is a major concern for the Board of Commissioners in carrying out its supervisory and advisory functions to the Board of Directors.
The Board of Commissioners believes that the Board of Directors implemented GCG effectively and consistently in 2021. For assessing the GCG implementation at Pelindo, the Board of Commissioners also assesses the risk management system, internal control system, and whistleblowing system.
RISK MANAGEMENT SYSTEM
The risk management process involves the systematic application of policies, procedures and practices for communication and consulting activities, context setting, and risk assessment, treatment, monitoring, reviewing, recording and reporting. Communication and consulting helps the risk owner understand the risk, as the basis for making decisions, and the reason for taking the required action. Communication increases awareness and an understanding of the risk, while consultation includes feedback and information gained to support decision-making. Coordination must be factual, timely, relevant, accurate and understandable. Information exchange must pay attention to the confidentiality and integrity of information, including individual copyright. The purpose of establishing the scope, context and criteria is to adapt the risk management process, enable effective risk assessment and adequate risk assessment. The scope, context and criteria include determining the process scope and understanding the external and internal context.
Up to the third quarter of 2021 (before the integration of Pelindo) the Company managed risks within the scope of ex-Pelindo 2. After October 1, 2021, when the legal merger of Pelindo 1, 2, 3 and 4 was carried out, the Company then rearranged the risk profile for 2021 to reflect the impact of changes in internal conditions (changes in organizational structure, relocation of Human Capital, changes in Company policies and others), and the external conditions of the Company (Pelindo integration, changes in Shareholders’ Aspirations and others).
The mechanism for implementing the Risk Management evaluation is carried out in stages, starting from the Port Branch to the Regional Risk Management Function then forwarded to the Head Office Risk Management Group, while for subsidiaries to the Subholding Risk Management Division then reported to the Head Office Risk Management Group, and for subsidiaries outside the business cluster evaluations are carried out directly by the Head Office Risk Management Group. The evaluations looked at the data when completing the risk profile in the Risk Control Self Assessment (RCSA) working paper, with an approach to the
