CORPORATE GOVERNANCE & SUSTAINABILITY RISK MANAGEMENT Existing Risks and Possible Impacts Risk Trend Mitigation Measures Political risks • Regular review of investment strategy, business Changes in the global and local political model and capital allocation in response to any landscape, policies and priorities may have impact of international tensions and geopolitical risk. significant impact on the business • Maintain high level of sensitivities to political and environment. Geopolitical risk and social issues by closely monitoring social media and international tensions may impact the government policies with a timely response. maintenance of the optimal portfolio mix. • Engagement with government authorities to Any trade restrictions and international anticipate political developments in order to plan sanctions may adversely affect operating appropriate responses and to ensure compliance costs and tenant portfolio. with applicable laws and regulations. • Maintain robust corporate governance practice through oversight functions (internal audit, risk management, the company secretary, legal counsel and independent non-executive directors). • Conduct regular screening and monitoring on key business partners with reference to international sanctions. Third-party risks • Conduct proper due diligence for potential joint Misaligned interests, cultural fit and reneging venture partners and perform regular assessment on commitments of joint venture partners as to credit rating and business performance. may lead to project delays, financial and • Ensure a robust drafting of legal documents reputational impact. Changes in financial to include dispute resolution mechanism and position resulting in liquidity problems, exit strategy. changes in leadership and stance of joint • Ensure joint venture to adopt or to develop venture partners resulting in a withdrawal or corporate codes with the same standard as that reduction of their shareholdings, of Swire Properties. contribution and commitments. • Maintain robust governance structure to ensure open and timely discussions with joint venture partners by means of regular board meetings with proper agendas, maintenance of financial budgets, proper documentation of actions and responsibilities, pro-active partnership management and engagement to minimise miscommunication or disputes. 116