Risk Management Structure and Operation
The Company has established the "Risk Management Policies and Procedures" as the highest guiding principle for risk management.
The Board of Directors is the highest decision-making body for the risk management of Oneness Biotech, responsible for approving, reviewing, and supervising the Company's risk management policies. Related organizations, policies, and procedures must be approved by the Board of Directors to ensure the effectiveness of risk management, and bear the ultimate responsibility. The Board of Directors was given authorization to establish the “Risk Management Committee”, composed of all independent directors.
The ESG and ERM Executive Committee is the unit responsible for the execution of risk management. The main responsibilities are execution-level matters in the supervision, evaluation and assessment of the Company’s risk. It shall exercise its duties independent from business units and operating activities, and shall report the operational status to the Risk Management Committee at least once a year. The most recent report to the Risk Management Committee and the Board of Directors was on February 27, 2025.
The company implements the Three Lines of Defense model to ensure the robust and effective operation of its risk management system:
Establishment of a Risk Culture
The "Risk Management Policy and Procedures" incorporates the spirit of risk management into the Company's operational strategy. Internally, the continuous promotion of risk management is not the responsibility of only a specific unit, but should be recognized by all employees to bear the responsibilities together.
Risk Management Process
With reference to the “Corporate Risk Management” published by Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the Taiwan Industrial Sustainable Development Association, we aim to enhance the resilience of our business operations by implementing processes such as identification, assessment, monitoring, reporting, and respond to control risks within acceptable.
2024 Risk Management Operations
The ESG&ERM Executive Committee convened a meeting in the first quarter of 2024. Based on the risk units' monitoring of relevant risk factors and events within their respective areas, the Executive Committee identified significant risk factors affecting the Company and formulated mitigation measures and response strategies. These were submitted to the Risk Management Committee and the Board of Directors on February 29, 2024.
Each risk unit implemented risk management measures according to the formulated strategies. Throughout the year, no risks significantly impacted the Company's operations. The results of the risk management efforts were reported to the Risk Management Committee and the Board of Directors on November 11, 2024.
Emerging Risk Management
In order to strengthen the management, control, and response to future risks, the Company not only predicts the aforementioned risks based on past experience, but also refers to literature published by domestic and foreign institutions to assess emerging risks to understand their possible impacts and formulate countermeasures.
- Surge of Drug Tariffs Due to Geopolitical Changes.
The political situation worldwide has become unstable in recent years. The new US government initiated a trade war based on "Economic Nationalism", imposing high tariffs on imported products in an attempt to protect its domestic industries, and these tariffs may include pharmaceutical products. If the US government implements drug import tariffs or non-tariff barriers in the future, it may have a significant impact on the Company’s export sales to the US market. Such policy change is out of our control and unpredictable, and its impact can be long-term and significant once it becomes effective. The potential impacts include:
Such risk has a high degree of uncertainty, and the risk mitigation measures established by the Company include:
▲Monitor policy changes continuously: Regularly track US trade policies and international status changes, in particular import and export measures related to the pharmaceutical industry.
▲Diversify market planning: Actively explore other markets (e.g., Europe, Africa, Asia, etc.) to reduce the dependence on one single market.
▲Supply chain flexibility: Engage in discussions and negotiations with overseas OEM factories to shift API production abroad, or through investment and cooperation, engage in acquisitions and mergers of existing local channels, to strengthen market presence and supply chain integration, and to adopt such methods as alternative solutions to sudden tariff changes.
※The above content is taken from the ESG Report
