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Corporate Governance

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Corporate Governance
We are committed to sound corporate governance and our systems and procedures are outlined in the Cathay Pacific Code of Conduct on Corporate Governance. We devote considerable time to identifying risks and ensuring that we put in place best practice to mitigate those risks

"At Cathay Pacific we have taken steps to lead on many sustainability challenges, our involvement in the Aviation Global Deal on environmental targets being a key example of this. Leading in this way will help to deliver success for our business and all its stakeholders. My Sustainable Development Steering Committee understands the important role it plays as it works carefully and seriously on the priority areas for action."

John Slosar, Chief Executive

The highest governance body is the Board of Directors led by the Chairman and comprises the Chief Executive and five other Executive Directors. There are also 12 non-Executive Directors, four of whom are independent. As well as having responsibility for our economic performance, the Board oversees the environmental and social initiatives undertaken in the company. More information can be found in our 2010 Annual Report, under the Corporate Governance Section (p.42-46).

Key issues raised by stakeholders on Governance
Role of the highest levels of management to take a leadership position on sustainability issues in the company and within the industry.
Risk management and Sustainable Development

The Corporate Risk Management Department (comprising risk management, legal, insurance and compliance teams) manages corporate risk and provides advice for the entire Group. The Group Risk Register is reviewed annually, with a commitment to ensuring that our risk management system is consistently in line with the AS/NZS 4360: 2004 risk management standards. In 2010, over 30 corporate risk briefings were held to understand, assess and respond to risk. Any specific risks identified are assigned to a Director and undergo a process of endorsement by the Audit Committee. We then develop action plans to respond to the risk.

Action plans are developed via discussion with the relevant departments or subsidiaries and with endorsement from Directors. Each action plan is documented with target completion dates and responsible parties with progress monitored regularly to reduce the risk exposure of the Cathay Pacific Group.

Our strategy towards specific types of risks such as audit, sustainable development and safety are reviewed by specific committees. The Audit Committee reviews the adequacy of the resources, qualifications and experience of the staff of the company's accounting and financial reporting function as well as their training programmes and budget. Sustainable development risks relating to commercial and operational delivery are assessed by the Audit and the Sustainable Development Steering Committees. Airline operational safety risk is reviewed monthly by the Airline Safety Review Committees, which is chaired by the Head of Corporate Safety and comprises Directors and senior management of all operational departments as well as our operational partners.

Potential economic measures related to climate change and carbon trading represent some of the risks to our business. A comprehensive study is being undertaken to understand the impacts these may have on our business, such that we can better manage these risks.