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Risk Management
- Rules and Regulations
- Whistleblowing System
- Legal Compliance Governance and Internal Audit System
- Independent Directors' Communication Status
- Functional Committees
- Board of Directors Members
- Board of Directors Operation and Education Development
- 公司治理
- Ethical Corporate Management
- Corporate Governance Structure
- Risk Management
- Intellectual Property Management Plan and Implementation
- Security and Regulation
Risk Management
Risk Management Vision
Driven by the vision to become the top choice for customers and play a pivotal role in the global shipping industry, Yang Ming is committed to sustainable operations and responsibilities by developing a comprehensive risk management mechanism to identify and mitigate potential operational and financial risks. Through rigorous controls, Yang Ming keeps business risks within acceptable levels while enhancing overall operational quality and value.
Risk Management Organizational Structure and Three Lines of Defense
Yang Ming’s risk management organizational structure comprises the Board of Directors, the Sustainable Development & Risk Management Committee, the Audit Department, the Risk Control Office, and all operating units
| Organization | Responsibilities |
| Board of Directors |
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| Sustainable Development & Risk Management Committee |
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| Audit Department |
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| Risk Control Office |
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| Operating Units |
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Three Lines of Defense in Risk Management
| First Line of Defense Operating Units |
Third Line of Defense Risk Management Units |
Second Line of Defense Auditing Unit |
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Risk Management Policy and Procedures
Yang Ming’s Board of Directors passed a resolution at its 411th meeting on March 12, 2026 to formulate the “Risk Management Policy and Procedures” as the primary guidelines for risk management criteria and standard procedures.
Yang Ming’s risk management procedures encompass risk identification, risk analysis, risk assessment, risk response, and risk monitoring. The Risk Control Office identifies risk items that may influence Yang Ming annually, analyzes their potential frequency and severity of loss, and then formulates and assesses countermeasures. Yang Ming not only assesses potential risk impacts through cross-department communication and data consolidation, but aligns potential risk impacts with its short-term, medium-term, and long-term operational goals. In accordance with internal audit requirements and standards, Yang Ming monitors potential risks continuously and implements response measures to control all types of risks on an ongoing basis.
| Risk Management Procedures | |
| Risk Identification | Identify potential risk events that may cause failure to achieve company goals, result in losses, or cause negative impacts, based on Yang Ming’s strategic objectives, business responsibilities, internal and external risk factors, and stakeholders’concerns. |
| Risk Analysis | Understand the nature and characteristics of identified risk events, analyze their frequency and severity, and thereby calculate the risk value. |
| Risk Assessment and Response | Map the risk analysis results to risk levels and prioritize risk events based on materiality principles to serve as the basis for subsequent response measures. |
| Risk Monitoring | Operating units implement risk management and control to ensure day-to-day risk monitoring. The Risk Control Office formulates risk management policies and monitoring mechanisms, as well as periodically consolidating and tracking the implementation of risk control measures across all units. In conjunction with annual internal and external audits, the Audit Office reviews the effectiveness of risk management process and corresponding risk measures, and reports audit results to the Board of Directors. |
Risk Management Implementation Status
Group Annual Risk Assessment Results
To implement risk management mechanisms, Yang Ming conducts group-wide risk identification and assessment annually, which is reviewing and assessing potential risk items, frequency of occurrence, and severity of impact in accordance with five major risk categories—strategic risk, operational risk, financial risk, compliance risk, and climate change risk. The assessment incorporates past operating performance, recent news, relevant research reports and data, as well as outlooks published by various external institutions and impacts of major international developments and policy shifts, and is conducted based on risk assessment forms, interviews with internal operating units, current operating conditions, and relevant external reports.
The results of the Group’s 2026 risk assessment were reported to Yang Ming’s Sustainable Development and Risk Management Committee at its 16th meeting on July 29, 2026, and the Board of Directors at its 414th meeting on August 12, 2026. A total of 61 units were assessed, including headquarters, Keelung, Taichung and Kaohsiung branch offices, subsidiaries, and regional centers. The assessment encompasses multiple dimensions, including operational activities, regulatory compliance, climate change, international geopolitics, and information security. Following internal interviews and the consolidation of external information, a total of 24 major risk items were identified, among which 4 items were classified as having a high-level of residual risk.
Note:The risk matrix disclosed only risk items rated as high and above (inclusive). Remaining medium and low-level risk items are continuously monitored and managed in accordance with Yang Ming's risk management procedures.
High Level Risk Items
| Risk Source / Risk Items |
Potential Impacts | Mitigation Measures |
|---|---|---|
| Strategic Risk: International Geopolitical Risks |
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| Operational Risk: Information Security Risks |
From a group organizational structure perspective, information security risks carry structural impacts, mainly manifested in Common Cause Failure risks associated with core systems and shared platforms, as well as lateral propagation risks resulting from cross-entity shared systems and user accounts. | Continuously promote various information security management systems and major cybersecurity incident drills to strengthen capabilities in identity authentication, email security, and access control. |
| Compliance Risk: Economic Sanction/Export Control Violation Risks |
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| Compliance Risk: Competition Law Violation Risks |
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Emerging Risks
| Risk Items | Potential Impacts | Mitigation Measures |
| AI Agent Risks |
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| Carbon Fee Risks | As global climate change issues grow increasingly severe, the shipping industry—a major source of global carbon emissions—faces a rising number of decarbonization regulations and carbon pricing mechanisms, such as the EU Emissions Trading System (EU ETS), FuelEU Maritime, the IMO GHG Fuel Intensity (GFI) standard, and other emerging national and regional regulations. Carriers must closely monitor regional regulatory developments to ensure full compliance across jurisdictions. | Establish a carbon management mechanism, continuously track policy developments, and conduct training programs to enhance organizational response capabilities. |
Risk Management Training Status
To strengthen risk awareness among Group employees and integrate risk management concepts into daily business operations, Yang Ming periodically conducts risk management training programs. In 2026, Yang Ming invites all employees to participate in training themed“All-Risk Management,”covering the principles and practices of comprehensive risk management, as well as the fundamental concepts of crisis and response management. The training aims to enhance employees’understanding of preparedness measures before disasters occur and response measures during incidents.
Major Incident Emergency Handling Procedure
Yang Ming has formulated emergency handling procedures for various operations, detailing the reporting and handling procedures for relevant events to control subsequent improvements. Drills are carried out regularly as well.
| Emergency Handling Procedures for Operations | Procedure Description | Implementation Drill／Promotion Frequency |
|---|---|---|
| Yang Ming Group's Working Reporting and Handling Major Incidents | The procedures govern the items to be reported, parties to be notified, content, and handling of major incidents with the Group, or those upon reception of crisis notice prior to a potential major incident, for effective control and handling before or after a major incident. | Irregular promotion |
| Major (Vessel) Accident Reporting & Response Procedure | Accidents are classified into different levels according to definitions, with corresponding response teams assigned. After an accident occurs, relevant departments are notified, international conventions and local regulations, flag state regulations are complied with, and subsequent investigations are cooperated with and necessary assistance provided. Finally, corrective measures are developed to prevent recurrence. | According to SOPEP oil pollution emergency plan and safety management plan requirements, regular drills are implemented, and ship-shore exercises are irregularly conducted according to regulatory requirements, simulating different scenario accidents for onboard and shore responses to disaster accidents. |
| Procedure or Work-related Accident and Emergency Response Plans | Each workplace should formulate emergency response plans so that when occupational disasters or accidents occur in the workplace, effective responses can be carried out according to the emergency response plan to minimize injuries and losses. | Regular implementation |
| Procedure for Handling Serios Crew Injury / Illness Death) | The procedure ensures that the Company’s ships can take timely and effective measures in the event of a major accident/injury/illness (death) to the personnel on board in order to minimize the injury to the personnel. | Irregular drills |
| Emergency Procedure for Shipboard Hazardous Goods | The procedure dictates the regulations for the elimination or mitigation of damages in the event of accidents/disasters arising from dangerous goods/ materials seafarers Yang Ming’s ships or during shipping. | The onboard SMS (Safety Management System Activity Schedule) has established hazardous cargo loading and leakage handling to be implemented every 2 months. |
| Procedure for Emergency Preparedness & Response Plans for Office Buildings and Premises | To prevent various disasters (natural disasters and fires, etc.) and emergency rescue, so that personnel life injury losses can be reduced, this procedure is formulated. |
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| Information Security Incident Management Procedure | To ensure that the Company's information and information communication assets can quickly and effectively handle information security incident reporting, take necessary response measures, reduce damage that incidents may bring, and prevent related matters when information security incidents occur. | Annual regular disaster recovery drill once a year |
| Epidemic Prevention and Response Procedures | The procedures are to enhance the monitoring and risk assessment of epidemics in locations where Yang Ming operates and to improve the preparedness and response mechanisms so as to reduce the risk of personnel infection and ensure the normal operations of the Company. |
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| Procedures for Reporting High risk Communicable Diseases by Agents | To regulate the process for agencies to report to headquarters when high-risk infectious diseases occur, including office operations and employee conditions, so that headquarters and agencies can effectively respond and handle during infectious disease periods, reducing the Company's operational risks. | Irregular promotion |
| Procedures for Handling (Container Yard) Accidents | The procedures govern the handling of accidents taking place in the Container Yard of Yang Ming, covering the appraisal of damages to personnel, containers, cargo, machinery or facilities, the attribution of liabilities, notarization, indemnity claims, insurance claims, etc. | Hold 1 hazardous goods training session and 2 emergency response training exercises annually, with time adjustments or increases as necessary. |