(1) Group Risk Management Committee and Risk Management Executive Committee
The FHC's Risk Management Committee was upgraded to become a functional committee under the Board of Directors on April 1, 2023. It comprises at least three directors, of which at least half are independent directors. The committee oversees risk management-related operating mechanisms. Risk Management Executive Committee are attended by the highest level supervisors of risk management units of the FHC and its major subsidiaries. These meetings serve as a risk management exchange platform, and supervise the implementation of the Group’s risk management.

(2) Risk Management System
The FHC and the subsidiaries have developed or applied risk management information systems for VaR calculation, credit scoring, credit risk alerting, conglomerate credit/investment limit, and operational event reporting.

(3) Risk Management Reporting
The risk management units of the FHC and its subsidiaries periodically submit risk management reports to the Board of Directors to fully disclose various risk exposure and compliance status. When a major risk event occurs (e.g., the U.S. banking crisis and Credit Suisse crisis in 2023), the risk management units would summarize information and report to their superiors to strengthen the implementation of risk management mechanisms.
The FHC periodically examines risk assessment indicators, exposure to concentration risk, and stress test results. It also reports the operating status of risk management to the Board of Directors on a quarterly basis (Note).


Note: Reports were submitted to the Board of Directors on March 9, May 11, and August 17, 2023.