GOVERNANCE The Boards are committed to ethics and integrity of action and have adopted a Board Code of Business Conduct and Ethics. This sets the appropriate tone from the top in respect of the desired organisational culture and assists the Boards in ensuring proper accountability within the Managers. In line with this, the Boards have a standing policy that a director must not allow himself or herself to get into a position where there is a conflict between his or her duty to CLAS and his or her own interests. For more information on CLAS’ board diversity, independence and performance, please refer to the Corporate Governance section on pages 94 to 98 and 100 to 112 of CLAS’ Annual Report 2023. REGULATORY COMPLIANCE CLAS strives to comply with all regulations in the jurisdictions it operates in and has no tolerance for any regulatory breaches which would significantly affect its ability to conduct its business operations. In FY 2023, there were no incidents of material noncompliance with the applicable laws and regulations relevant to the Managers. ENTERPRISE RISK MANAGEMENT The Managers maintain adequate and effective systems of risk management and internal controls (including financial, operational, compliance and information technology (IT) and sanctions-related controls) to safeguard Stapled Securityholders’ interests and CLAS’ assets. The Boards have overall responsibility for the governance of risk and oversee the Managers in the design, implementation and monitoring of the risk management and internal controls systems. The Audit and Risk Committee (ARC) assists the Boards in carrying out the Boards’ responsibility of overseeing the risk management framework and policies for CLAS. The Managers’ Enterprise Risk Management (ERM) Framework is adapted from the International Organization for Standardization 31000 International Risk Management Standards and is benchmarked against other relevant best practices and guidelines. It sets out the required environmental and organisational components for identifying, assessing, responding to, monitoring and reporting material risks in an integrated, systematic and consistent manner. The ERM Framework and related policies are reviewed annually to ensure its continued relevance and practicality. As part of the ERM Framework, the Managers undertake and perform a Risk and Control Self-Assessment annually to identify key material risks (which include new and emerging risks), the mitigating measures and any opportunities that could be leveraged on. The adequacy and effectiveness of the systems of risk management and internal controls are reviewed at least annually by Management, the ARC and the Boards, considering the best practices and guidance in the Risk Governance Guidance for Listed Boards issued by the Corporate Governance Council and the Listing Manual. The ESG risks identified include fraud, bribery and corruption risk, environmental risk, health and safety risk as well as regulatory and compliance risk. CLAS believes that having the right risk culture and people with the right attitude, values and knowledge are integral to its success. To enhance its employees’ risk management knowledge, CLI’s risk management team regularly conducts workshops which are targeted at different management levels and functions. It also promotes a culture of risk awareness which embeds risk management principles in decision-making and business processes. For more information on CLAS’ ERM Framework, including the material risks identified, please refer to the Risk Management section on pages 87 to 92 of CLAS’ Annual Report 2023. 67 CAPITALAND ASCOTT TRUST
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