TWM established “Risk Management Policy” in 2011, and was revised by the Board of Directors for the second time in 2020 as the highest guiding principle for risk management. In advance to achieve the benefits of prevention, TWM actively plans risk management policies, organizational structures and risk management systems to address the risks that the company’s operations may encounter to. . In 2015, the existing risk management structure intergraded with control mechanism.
In addition, the "Risk Management Committee" was established and approved by the board of directors to strengthen the risk management mechanism in the company.
The Internal Audit Office performs risk assessment at the end of the year periodically. The risks are evaluated for importance and probability and gave their risk value by Internal Audit Office.
The level of risk value as the basis will be used to arrange an audit plan for next year. No shortcomings and irregularities of the internal control system were detected in 2020. Only 73 concrete suggestions were provided for each operation process as a reference for an improvement of the management quality by each department. As for items requiring improvement and submitted suggestions, constant tracking is implemented on a quarterly basis until improvements are completed.
TWM integrates and manages various important risks that may affect operations and profits by proactive and cost-effective manner along with a response mechanism from the three-level risk management.
The company's important risks include "Operating risk", "Risks related to privacy and information security", "Innovation risk"... and so on. Please read the detail content in the company's annual report.
TWM sets up "Risk Management Committee" for supervising and strictly controlling risk management related issues, and promotes a risk management-oriented management model to achieve the goal of improvement continuously.
The Risk Management Committee is hold at least once every six months, and communicates with various functional committees as “Operations and Management Committee”, “Occupational Safety and Health Committee”, “Communication Quality Assurance Committee”, “Environmental Management Committee”, “Cyber Security and Data Privacy Protection Committee” , “ESG Steering Committee” and “Innovation Management Committee” and other special committees to discuss the issues of risk management regularly , for accurately control risk issues in different fields.
In the event of a major event or proposal, each responsible unit shall report it to a meeting of operation management or each management committee to decide the necessary measures. Each functional committee not only proactively focus and identify the potential risk issues within internal and external for the company, but bring up appropriate solutions.
The operation record of the “Risk Management Committee” is coordinated and submitted by the Internal Audit Office to the chairman for approval. The Internal Audit Office follows up the status of operation and report to the Board of Directors at least once a year to ensure that relevant risk issues are effectively managed.
The company has proactively promoted the mechanism of risk management since 2011.
The followings are the status of main operating over the years.
* Emerging risk: defined as an emerging and external risk that is expected to have a significantly long-term impact on the company's businessPlease Swipe Left or Right View All.
|Category||Key Risk||WEF category||Description||Trend||Impact||Mitigating actions|
||Remaining stable||The NCC has announced the draft "Internet Audiovisual Service Management Act" on July 15, 2020 to regulate the over-the-top service with a voluntary registration mechanism. However, the draft authorizes NCC to consider certain factors, such as the number of users, turnover, click flow, internet traffic volume, market influence, and other significant public interests to require the OTT operators with any of the said nature to register. In order to halt PRC OTT operators that illegally provide OTT services, either by itself or through an agent, without obtaining permission in accordance with the Act Governing Relations between the People of the Taiwan Area and the Mainland Area, the draft explicitly demands that operators of telecom business and the related internet service providers should not provide equipment or service to PRC OTT operators, and violators will be fined. The draft is still seeking opinions, and has no immediate impact on the company's related businesses.||The draft will impose necessary controls on internet audiovisual service providers. Focusing on the balance of regulatory environment for domestic and overseas players, and the development of digital convergence, the company is closely monitoring the progress of the policy and continues to communicate with the NCC in hopes of maintaining a regulatory environment for the industry’s development.|
|Policy and legislation changes||
||On the rise||The “Digital Development Department” will be established in the future and the Executive Yuan is launching an organizational transformation plan in 2021. The “Digital Development Department” will include five major aspects: information, cybersecurity, telecommunications, internet, and communication. The related units of NCC, the National Development Council, the Department of Posts and Telecommunications, the Technology Division of the Ministry of Economic Affairs, the Electricity Resources Group of the Industrial Bureau, and the Information Security Division of the Executive Yuan will be consolidated.||The establishment of the Digital Development Department has a powerful influence on the direction of supervision and guidance policies for industry. The company will pay close attention to the progress of organizational transformation.|
|Network bandwidth resources||Climate change/ natural disasters*||Environmental||
||On the rise||Impacts of climate change to the Company include:
|Telecommunication technology innovation*||Technological||
|Information security||Information privacy and security*||Technological||
||On the rise||
||On the rise||
||The company cooperated with NCC to implement information attack drill in response to hacking
attacks. We continued to report security protection measures and report progress to the Information
Security Steering Committee related to following items,
|Business operation||Occupation safety||
||on the decline||
|Market||Alternative and emerging business models||
||on the decline||
||Remaining stable||FET cooperates with Gt in 5G marketplace. TSC cooperates with CNC(中嘉寬頻) by providing mobile and fixed broadband services together to compete with TWM Double Play.||TWM offers higher subsidies for longer-term contract plans to attract more 5G true users and to
expand the potential market of 5G value-added services.
We bundle Double Play plans with exclusive cloud gaming services to increase our differentiation. We also offer variable smart home appliances bundle plans to create the user base for Smarter Home platform services in the future
|Changing customer requirements*||Economic||
||Remaining stable||Due to the popularity of 4G low-price unlimited data plans and VOIP apps, the revenue of telecom operators has dropped significantly even with growing data usages.||The demand of 5G devices is growing since 5G launch. TWM provides various value-added services and cloud gaming to increase 5G revenue, such as myVideo, myMusic, GeForce Now cloud gaming, IOT device bundle plans, smarter home appliances, and wearable device packages.|
||Remaining stable||Taiwan’s population began decreasing for the first time in 2020. Due to the longer life-cycle of mobile phones of elder people, the phone bundle plans can’t attract their subscription. There will be an effect on revenue in the long run.||We provide various product /service bundle plans for elder customers to meet their needs.
We rolled out exclusive service “my angel” with a special watch, which can protect elder customers from getting lost.
|Innovation management||Innovation kinetic energy growth||
||On the rise||