The Company's overall risk management philosophy.
Review of the effectiveness of the risk management system
The Board of Directors of Centro Escolar University understands the importance of risk management. In like manner, the board had reviewed the risks that may challenge the company and is certain that risk management system is effective and adequate.
The Board regularly conducts review of risks on the basis of the report of management at least once a year or as maybe necessary,. Whenever there is a prescribed risk management immediately reports to the executive directors and to the Board. To assess the effectiveness of risk management system the directors must:
- 1. Ensure that an overall risk management structure, policies and procedures are being observed by the Company.
- 2. Review the adequacy of the company’s risk management process.
- 3. Review the results of the annual risk assessment done by the designated Chief Risk Officer (CRO)designated by the executive committee. The report should include the material financial and non- financial risks that may have an impact on the Company and the corresponding measures in addressing the said risks.
- 4. Evaluate the risk management report submitted by the CRO on a quarterly basis.
- 5. Monitor the risk management activities of the company and evaluate the effectiveness of the risk mitigation and action plans, with the assistance of the internal auditors.
The the company’s risk management policy, setting out and assessing the risk/s covered by the system (ranked according to priority), along with the objective behind the policy for each kind of risk:
|Risk Exposure||Risk Management Policy||Objective|
|Credit Risk||The Company has an established policy that a student should pay his tuition fee balance before he can be issued a clearance for enrollment.||To ensure collection of tuition fee of currently enrolled students.|
|Liquidity Risk||The company ensures that it has sufficient cash to meet expected operational expenses and to cover scheduled approved capital expenditures.||To ensure continuous, undisrupted operation of the company and to meet financial obligations as they became due.|
|Market Risk||Ensures that the Company’s exposure to market risk for changes in interest rates will not significantly affect its interest income from deposits.||To maximize interest income from time deposits.|