Policies and objectives
Corporate Risk Management Guidelines
Annual Risk report
งาน กบข.
กิจกรรมต่าง ๆ

Organizational Risk Management Approach

The management of GPF is consisted of committee members responsible for policy directions and management framework. It is also supported by the Good Governance Subcommittee, the Risk Management Subcommittee, and the Audit Subcommittee. All of which are comprised of representatives from the Committee of the GPF and experts in the relevant areas. Such supporting mechanism has contributed to the efficiency of GPF and sufficient coverages on important risks and issues.

The Risk Management Subcommittee formulated a framework for risk management, where each risk owners need to perform Risk and Control Self-Assessments with the aim of timely identifying the root causes of the risks. The careful and thorough measure will ensure that GPF has a strong risk management system with guidelines to prevent future risks.

GPF laid down rules to ensure effectiveness of risk management and internal audit in every layers of the operation. GPF formulated a risk management master plan to oversee its management development and risk evaluation. The plan is consisted of 5 aspects:

  1. Strategic Risk
  2. Financial Risk
  3. Reputation Risk
  4. Operation Risk
  5. Compliance Risk

The monitoring of each risk’s status is performed through Risk Dashboard reports, which specify the GPF’s risk appetite and tolerance of each risk indicators. The report then is presented monthly to the Board of Directors and the Committee of the GPF to acknowledge and give out immediate course of actions. Furthermore, GPF employs the international practices on the “Three Lines of Defenses” in order to ensure its objectives in risk management throughout every layer of the organization.

  • (1) First Line of Defense: Operational Management

    The operational management is specified to provide clear separation of works between the operators and the managers. It includes an appropriate system for the operational processes, financial report preparations, and other key reports for the information of the executives.

  • (2) Second Line of Defense: Internal Monitoring and Oversight Functions

    The second line will stipulate the internal control policy framework, so that it complies with the relevant standards, rules, and regulations.

  • (3) Third Line of Defense: Internal Audit

    The internal audit is an independent unit that reports directly to the audit committee. It audits and evaluates the sufficiency of the monitoring operations, risk management, and the controls of operational units and monitoring units.

GPF assesses both internal and external factors that will determine the success of the GPF. We also perform Strength, Weakness, Opportunity, and Threat (SWOT) analyses in order to identify the strengths of GPF and utilize those to cover its weaknesses and prevent threats to the operations of GPF. In addition, GPF systematically evaluates its own strategic risks and also use those results to develop its yearly organizational plans and strategies.

GPF’s market risk management emphasizes a balance between the risk and return of the long-term investment. GPF employs scenario analyses to make clear of the possible impacts of the risks, as well as prepares measures to prevent and respond to those risks. Measures include consistent monitoring, investment strategy formulation or Strategic Asset Allocation (SAA), and exchange rate risk management. Moreover, GPF constantly revises the tracking error as a risk indicator, with the objective to appropriately manage alpha risk and correspondingly specify SAA. Through these measures, GPF aims to achieve above-benchmark returns, under the policy framework on expected return and risk level as approved by the Committee. Credit risk management pertains to both to the risks of the securities’ issuers as well as the securities themselves. The securities’ issuers of the securities in which GPF invested are expected to consider their credit risk management framework, evaluate their partners’ credit worthiness, and consistently revise their credit measures to be up-to-date. This is in order to minimize the risk resulting from occurrences that the securities issuers or their partners may not be able to fulfill their obligations. GPF is equipped with systems to monitor its liquidity as well as evaluate the risks associated with the quantity and complexity of the transactions, in addition to liquidity risk evaluation concerning the payouts for members whose membership has been terminated, especially when members retire every September. GPF prepared income and expenses projections in order to ensure that members will receive their timely benefits and that the ongoing investments are not negatively affected.

GPF sees the importance of the ethics and work approaches of the employees. Thus, GPF has specified the rules, channels, and procedures in order to welcome clues of fraud and complaints. In addition, GPF provides news, updates, and immediate clarifications for relevant issues, in order to maintain the trusts of the members and others towards GPF as well as its own reputation.

GPF specifies an annual internal control evaluation for every operation processม. This is to comply with the Ministry of Finance’s rules regarding government agencies’ standards and rules on internal audit, 2018, which covers the types of fraud that are possible within the scope of GPF’s work; for example, income and expenses, and procurements. In addition, GPF sets out risk evaluation (both in terms of likelihood and impact) from existing control activities, where the activities will be improved accordingly if they are found to be insufficient or inefficient. These measures are aimed to prevent the risks from the organization. It is also regularly reported to the Risk Management Subcommittee for consideration and approval. Furthermore, we have also prepared channels for filing complaints and clues of fraudulent activities.

GPF has developed investment monitoring system in order to ensure investment compliance. This is in order to make certain that GPF’s investments follow the specified rules, regulations, and policies. In addition, GPF also prepared guidelines on the compliance program, to guarantee that each division performs under the same standards. GPF also continually revises its rules and operation processes to be the most up-to-date, including its monitoring and quarterly reports for the Audit Subcommittee.