Nothing Left To Chance

In a world where risk is the norm, Petron stands out as a company that refuses to leave anything to chance. That’s why they have implemented a robust enterprise risk management system that focuses on identifying and managing potential risks even before they become actual issues.

Petron’s approach to risk management is built on a foundation of good governance and sustainability. They recognize that managing risks not only protects their business, but also helps to ensure the safety of their employees, the communities in which they operate, and the environment.

Petron’s operations follow an integrated value chain, which means risks can arise from every process and even cut across different divisions. The major risks managed by Petron are foreign exchange risk, potential operational disruptions, profit margin and cash flow risk, and regulatory risk. These risks could have a significant negative impact on the company if left unchecked.

Following a bottom-up approach, each of its divisions is required to conduct regular risk assessments to identify and map potential risks, with action plans formulated to manage them effectively. This proactive approach ensures that risks are identified and mitigated, no matter how small or large they may be. To ensure that all risks are addressed, the results of these assessments are funneled up to the Management Committee and subsequently the Board of Directors through the annual Business Planning process.

But Petron does not stop there. They have designated specific corporate units with special duties to ensure effective oversight and technical assistance. For example, the International Trade Finance Section, under the Treasurers Department, oversees foreign exchange hedging transactions. The Transaction Management Unit, operating under the Controllers Department, provides backroom support for all financial transactions. The Corporate Technical Services Group is responsible for ensuring compliance with domestic and international standards for health, safety, and environment. Lastly, the Internal Audit Department is tasked with implementing a risk-based auditing approach to ensure the effective implementation of its risk management framework.

By adopting a comprehensive approach to risk management, Petron ensures that they are not only prepared for the unexpected but also able to operate sustainably in the long run. With a commitment to good governance and sustainability, they are able to build trust with their stakeholders, create value for their shareholders, and contribute to the well-being of the communities in which they operate.