The Committee is authorized as follows:

  1. To consider the risk management policy, risk assessment, risk management plan and risk management manual to be proposed to the Board of Directors' approval prior to proceeding
  2. To support the management of top executives by setting up the risk management structure to cover entire organization; implementing the risk strategy by initiating practice and investment in appropriate system
  3. To propose the reports on sufficiency of system and risk controls to the Board of Directors of MCOT Plc.
  4. To centralize the monitoring of critical risk reported risk management coordinator
  5. To review the risk management reports and to supervise the effectiveness of management operation to manage unacceptable risk
  6. To communicate with the Audit Committee for critical risks
  7. To negotiate for evaluation on appropriate operating results of MCOT Plc.
  8. To coordinate with the Ministry of Finance and consultant companies
  9. To provide the agreement on evaluation of operating results of MCOT Plc. under the approval of the Board of Directors and the Ministry of Finance and the duration determined by the Ministry of Finance

MCOT Plc. has recognized the dominant role of risk management as an important management mechanism enabling the organization to attain its established objectives and goals, to reduce potential loss, and to boost the competitiveness. Risk management is also an essential component of good governance. By the above reasons, MCOT Plc. established a systematic risk management, which has been improved continuously. The Risk Management Committee was officially established to devise the risk management policy, to monitor the entire risk management process in the organization, and to appoint the Risk Coordinators as representatives in each department, who are in charge of monitoring, assessing and preparing risk reports at the department level.

In the meantime, risk management is a compulsory issue inserted in the job description of every department to ensure that all officers recognize and value as such. It shall be deemed a duty and responsibility of every department to manage and control risks at the acceptable level. The Risk Management Handbook and risk management plans were prepared as the operating guidelines. Potential risks have been regularly monitored and assessed to correspond to internal and external changing circumstances.

The risk management policy is explicitly placed by MCOT Plc. according to the following statement, MCOT Plc. shall apply the risk management to be a tool of managing its broadcasting business to enhance the highest efficiency of international broadcasting standards. In addition, this risk management system shall be further developed; meanwhile all employees are educated to have good understanding about this matter and to be involved in the risk management process so that the organizational risks are acceptable. Risk management shall also prevent the loss of potential opportunities, which makes the organization's operations attain its objectives that finally trigger the good governance, and add the sustainable value for the organization.

In 2008, MCOT Plc. has followed the risk management process by having top-down brainstorms among the Risk Management Committee and senior executives of MCOT Plc., and bottom-up brainstorms among operating officers in order to identify potential risk subject to possible circumstances in 2008 deriving from internal and external factors, and to assess the extent of risks. The Organizational Risk Management Plan for Year 2008 was also prepared to integrate with vision, mission, and strategy of MCOT Plc., and to respond to 6 high-risk transactions. The details of each risk, management of such and types of risk were summarized below:

1. Financial Risk

Risk in relation to the Broadcasting Act and other related laws

Due to the Government's policy on media reform and enactment of the Broadcasting Act, the existing frequencies must be re-allocated. It is likely that the frequencies currently held by MCOT Plc. may be reduced. The Company, in addition, may have to apply for related business licenses requiring some fees for such business licenses and assigned frequency licenses, as well as contributions given to the Broadcasting Development for Public Benefit Fund not more than 2% of revenues directly and indirectly gained from advertisements. Regarding the Act on the Organizations to Assign Radio Frequency and to Regulate the Broadcasting and Telecommunication Services, MCOT Plc. may face a risk of giving to the National Telecommunications Commission (NTC) not more than a half of all revenues, after the deduction of all operating costs, gained by the concession granted to private companies for the use of spectrum. This allocation may adversely affect MCOT's expected revenues.

To enable MCOT Plc. to attain the expected operations and operating results, certain essential measures/ working plans/ activities were set up to reduce such potential risks and impact. To elaborate, media content broadcast by MCOT Plc. covered the quality program supplies and production, either local or international, the researches and analysis of broadcasting programs, audience, listeners, and business competitors. For the efficiency in program selling, the marketing and sales strategies have been continuously developed while various media under MCOT's management were synergized. Other new markets have been more approached; meanwhile, the organization has been reformed to be more active for business operations, and more professional personnel were engaged by MCOT Plc. MCOT Plc. has also expanded its business patterns by creating new businesses and operating the integrated business in order to add the media value, which directly boosted the company revenues.

In the meantime, MCOT Plc. has never ignored the cost management. The Ministry of Finance requires that the Economic Value Management (EVM) be applied to the internal management. In establishing the EVM center, there must be cost allocations between internal departments, which reflect actual operating costs of each department. EVM is another critical tool boosting the efficiency in cost management and competitiveness, which add the organizational value eventually.

2. Operating Risks

Human resource management may not correspond to variable circumstances timely.

Among rapidly changing circumstances in the near future, especially in the fields of technologies and laws, if the human resource management and development systems of MCOT Plc. are not efficient when it is unable to correspond to those changing circumstances and harsh competition, the organization will inevitably confront certain risks. MCOT Plc. has recognized the significance of such risk management; so it has tried to prepare its personnel to correspond to those variable situations timely. As a result, both HR management system and HR development system have been improved.

In 2008, MCOT Plc. applied Key Performance Indicators (KPI) at the office level to boost the efficiency in measuring and evaluating the work performance of those offices. It is likely that MCOT Plc. may have in-depth development of KPI to link the work performance with compensation payments, which should be more tangible and explicit. In addition, MCOT Plc. valued the reform of organizational structure, manpower management, and management of compensation and incentives in terms of engagement status in order to support a proactive business operation of MCOT Plc. At the same time, MCOT Plc. placed a plan in the event of executive shortage in the future. MCOT Plc. also valued the learning culture based on the knowledge management system in order to boost its business competition competence to further stand as a learning organization, and to add sustainable value to this organization in the long run.

MCOT Plc. may be claimed against any damages broadcasted through the media of MCOT Plc.

MCOT Plc. is a broadcasting service provider; so it may experience risks relating to liabilities for damages against any programs broadcasted through its media network, as well as other reputation harm, negligence, infringement of copyright, patent or trademark and other lawsuits caused by the broadcast attributes and contents. Such risk may adversely affect the Company's image, acceptance by the audiences/listeners, public confidence, which may affect the Company's popularity among the audiences/listeners. The claims against such damages may be in the monetary form.

However, MCOT has controlled such risks, except making the insurance to reduce them, by assigning the Office of Corporate Law to coordinate and take care of television, radio and news operating divisions to ensure that they have more concern and prudence on this matter. Those controlling actions also included the setting-up of good internal control measures, issuance of regulations, working procedure, as well as training courses on relevant laws to improve performance skills of all employees, and to reduce possible risks. The emphasis on this matter was also disseminated via other digital media such as mobile phone, which remains favorable.

The Company has not yet attained a perfect IT system.

Nonstop technological development leads to new innovations, which result to great changes in the mass media and telecommunications business; for example, changes from analog technology to digital technology and wireless communications at present. By these innovations, the data communication could be done unlimitedly, which gave direct impact to mass media entrepreneurs when they must revolutionize all working procedure.

MCOT Plc. has recognized the necessity of developing the information technology to correspond to various changing situations because the IT development reduces some business risks and loss of business operations while it adversely boosts the organizational competitiveness. MCOT Plc. placed the information technology development guideline in part of ICT infrastructure to be prepared to serve the future ICT system after the expansion of existing businesses and the emerging of new businesses. Additionally, the ICT system must be developed to support MCOT's business management and enrich its risk warning system as preparedness for a safety of ICT system to enhance the entire working competence.

3. Strategic Risks

Risk from the policy changes

The changes of the Board of Directors and the President largely resulted to the establishment of policies and all facets of operation in MCOT Plc., including revenues, expenses, organization image, confidence in investors and stakeholders. MCOT Plc. has taken certain actions to tackle this risk. To elaborate, the Board of Directors of MCOT Plc. appointed the Nomination Committee to select qualified and suitable candidates to hold the directorship. The selection and nomination must not be contrary to any and all related rules and regulations. The selected candidates shall be proposed, based on the regular and transparent process, to the Board of Directors and the Meeting of Shareholders. MCOT Plc. also placed explicit and written rules and procedure regarding the proposal of agendas to the meetings of shareholders by the shareholders of MCOT Plc., and nomination for company directors subject to the principle of good governance.

4. Compliance Risk

Risk in relation to the Broadcasting Act and other related laws

Due to the Government's policy on media reform and enactment of the Broadcasting Act, the existing frequencies must be re-allocated. It is likely that the frequencies currently held by MCOT Plc. may be reduced. The Company, in addition, may have to apply for related business licenses requiring some fees for such business licenses and assigned frequency licenses, as well as contributions given to the Broadcasting Development for Public Benefit Fund not more than 2% of revenues directly and indirectly gained from advertisements. Regarding the Act on the Organizations to Assign Radio Frequency and to Regulate the Broadcasting and Telecommunication Services, MCOT Plc. may face a risk of giving to the National Telecommunications Commission (NTC) not more than a half of all revenues, after the deduction of all operating costs, gained by the concession granted to private companies for the use of spectrum. This allocation may adversely affect MCOT's expected revenues.

However, to correspond to this risk, MCOT Plc. also appointed a committee in charge of corresponding to the Act by initiating many reforms in the organization including laws, technologies, and management. The studied development and guidelines were inserted in the MCOT Strategic Roadmap. MCOT Plc. also prepared to apply for licenses as required by the Broadcasting Act, and the draft Act on the Organizations to Assign Radio Frequency and to Regulate the Broadcasting and Telecommunication Services for the operation of continual businesses (from existing businesses) as well as engineering license (for a new business of MCOT Plc.).