As a company within a State-Owned Enterprise and a subsidiary of PT Kimia Farma Tbk, PT Kimia Farma Trading & Distribution (KFTD) is inseparable from business risks that may originate from changes in the external and internal environment related to business management.ย
Therefore, KFTD Risk Management comes as a response, proposing a process with four key stages: determining risk context, implementing Risk Assessment, monitoring and review, and communication and consultation.
Determining Risk Context
This process considers internal and external contexts, not to mention accommodating stakeholders’ ideas and perceptions in formulating them.
Implementing Risk Assessment
The implementation comprises the following processes.
- Risk identification โ and their potential impacts
- Risk analysis โ using qualitative and quantitative methodsย
- Risk evaluation โ to obtain a list of risks that require immediate and further handling
- Risk management (handling)
Risk Management in KFTD
The risk-handling or mitigation process may include some decisions that may be put into force.
- Avoiding risk
- Escalating โ shifting risk to higher authorities
- Removing โ eliminating the sources of risk
- Reducing โ reducing the likelihood and/or the impacts that occur
- Accepting risk
Monitoring and Review
Part of the evaluation, monitoring and review needs to be thoroughly planned and ongoing. It requires assigning a person in charge for each activity. Such activities can be associated with internal audits for continuous learning and improvement.ย
The company will also assess the maturity level of the risk management implementation on an annualย basis.
Communication and Consultation
Communication and consultation with all stakeholders must be carried out in every activity, from planning to implementation to reporting. During the risk management process, it pays attention to the process between units in KFTD to accelerate the risk handling process and direct the responsible person in charge of resolving any risk.ย
Moreover, any changes and developments in risk management must be informed to all stakeholders.
The success of KFTD sustainable risk management in preventing and handling any KFTD legal issues will depend on the integration of risk management into corporate governance and all organizational activities. It requires support from stakeholders, especially Top Management.