Risk Management Framework and Procedure
Ennoconn has established the “Risk Management Framework and Procedure”, which was approved by the Board of Directors in 2020, as the company’s highest guiding principle for risk management. The company evaluates risks on a regular basis each year and formulates and implements a risk management policy for each risk, covering mechanisms such as management objectives, organizational structure, attribution of authority and responsibility, and risk management procedures, in order to effectively identify, measure, and control each of the company’s risks and keep the risks arising from business activities within an acceptable range.
Scope of Risk Management
Ennoconn is committed to integrate and manage all potential strategic, operational, financial, and hazard risks that may affect operations and profits in a proactive and cost effective manner. Enterprise Risk Management is used to assess the frequency of risk events and the severity of impact on the company’s operations, define risk priorities and risk levels, and adopt corresponding risk management strategies according to risk levels. The company’s risk management includes the management of “strategic risk”, “operational risk”, “financial risk” and “other risks”.
Risk Management Organization
The company’s audit committee supervises risk management operations, the general manager’s office is responsible for coordinating various risk management-related affairs, and the audit office audits risk management operations to monitor the effective operation and execution of the company’s risk management.
At least once a year, the general manager’s office submits the company’s risk management operations to the audit committee and reports to the board of directors.
Risk Management Implementation
Ennoconn regularly evaluates risks every year and prepares risk management policies, such as objectives, organizational structure, attribution of authority and responsibility, and risk management procedures, and implements them in order to effectively identify, measure, and to control business risks within an acceptable range.
Ennoconn’s 2023 risk management was reported to the Board of Directors on November 14, 2023.
Risks and Remedies in 2023
1. Remedies for International trade barriers and geopolitics
Establish manufacturing bases outside China and Taiwan
Improve global supplier division of labor and ecosystem
Optimize product structure and control rising costs
Let customers and partners reach a consensus on matters of concern
2. Remedies for Global inflation rises and wars
Master the shipping schedule of orders in hand, destock materials and parts, and strictly control the delivery of components
Report rising material and manufacturing costs to customers in a timely manner
Actively strengthen R&D and design technical capabilities to lock in markets with high gross profit and high annual compound growth
Expand ESaaS (Ennoconn Solution as a Service) open platform
Create corporate resilience in company operations