Page 134 - TSMC 2022 Annual Report

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Risk Risk Appetite and Risk Risk Management Scope
TSMC TSMC has defined its risk risk appetite statements which which outline the the nature and extent of the the risks which which TSMC TSMC is is is willing to take in in in in pursuit of its business goals These risk appetite statements are:
● Risk taken should be be carefully evaluated commensurate with with rewards and be be in in in line with with the Company’s strategic investment financial and corporate objectives ● Risk considerations are embedded into business operations and managed within the the risk risk tolerance (risk indicators) of the the divisions functions and Company ● TSMC will not not invest or participate in in in any any business activities that exceeds our risk tolerance The Company does not not condone safety
related breaches or or lapses non-compliance with laws and and regulations as as as well as as as acts such as as as fraud bribery and and corruption Adopting the the five-step risk management process consisting of of the the identification assessment response monitor and review of of risks risks risks risks assessments are are performed by key functional units to form form the enterprise-level risk risk risk map and mitigation plans that are are presented to the Audit Committee This process is is is supported by ongoing education and awareness efforts in in in fostering a a a a a a a risk-aware culture and building risk competencies ● Risk Management Scope
● Industry developments
● Changes in in in technology (including IT security)
● Decrease in in demand and and average selling price
● Competition
● Changes in the government policies and regulatory environment
● Economic risks (including interest rate fluctuation foreign exchange volatility inflation and amendments to tax regulations or implementation of new tax laws)
External financing
● High-risk/highly leveraged investments lending endorsements and and guarantees for other parties and and financial derivative transactions
● Impairment charges
● Sales of of of significant numbers of of of shares by TSMC’s TSMC’s directors and/or shareholders who own 10% or or or or more of of of TSMC’s TSMC’s total outstanding shares ● Trade policies ● Natural and man-made disasters ● Capacity expansion
● Construction of new fabs ● Sales concentration
● Purchasing concentration
Intellectual property rights
● Litigious and non-litigious matters
● Mergers and acquisitions
● Recruiting quality personnel
● Future R&D R&D plans and expected R&D R&D spending
● Change in corporate reputation and impact on on the Company’s crisis management ● Change in management ● Non-compliance with export control environmental and climate change related laws regulations and and accords and and failure to timely obtain requisite approvals necessary for conducting business ● TSMC recognizes that its systems and and processes provide reasonable but not absolute assurance and and hence continually improve to ensure that its ability to to manage and and and respond to to risks and and and opportunities remain relevant and and and effective Risk Management Organization Risk management management in in in in in TSMC involves the reporting and and oversight structure involving both Board of of Directors and and management management of of TSMC TSMC that seeks to embed sound risk management practices in in business decisions and operations across TSMC TSMC The Board of Directors is is responsible for the the governance of risk and has authorized the the Audit Committee to to review TSMC’s ERM framework At the the the the management management level the the the the risk management management organization is is is is composed of the the the the Risk Risk Management Steering Committee the the the the Risk Risk Management Management Management Executive Council
the the Risk Risk Management Management Management Taskforces
and the the Risk Risk Management Management Management Division The Risk Management Division works with each function in in applying the ERM framework to assess and mitigate risks throughout TSMC by risk risk risk monitoring conducting workshops and and implementing risk risk risk related policies and and guidelines Annually the risk risk risk management organization reports to the the Audit Audit Committee Committee on on on TSMC’s key risks and and mitigation efforts and and the the Audit Audit Committee’s Chairperson reports to to the the Board of of Directors on on on the the risk risk profile and risk risk mitigation measures being taken ● Strategic Risks
Operational Risks
Financial Risks
Other Risks