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Our Management Approach

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Our Management Approach

Corporate governance and risk management

Our highest governance body is the Board of Directors led by the Chairman and comprising the Chief Executive and five other Executive Directors. There are also 12 non-Executive Directors, four of whom are independent. As well as dealing with 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 (Pg. 42-46).

The Chief Executive is accountable for the Sustainable Development Policy. This Policy is in place to help create long term value by embedding sustainable development principles and practices into the way we govern the company, manage risk and seize opportunity. Our Sustainable Development Steering Committee comprises General Managers and Managers representing the Board, safety and security, finance, corporate risk, sustainability management, purchasing, internal audit, marketing, customer services, engineering, cargo, ground services and human resources, and reports directly to the Board. Our governance structures are linked to the Swire Group’s Environment and Risk Management Committees for internal audit purposes.

Environmental management

Our SD Policy outlines our commitments such as regulatory compliance, effective environmental management throughout our operations, staff education, stakeholder engagement and the target-setting process.

Our Environmental Affairs Department works with various operational teams as well as with the Cathay Pacific Environmental Committee, Sustainable Development Steering Committee, the Climate Change Long Term Action Group, and the Swire Group Environmental Committee. The Department reports directly to the Management Committee level through the Director of Corporate Affairs.

An Environmental Management System (EMS) based on ISO14001:2004 standard has been set up since 1997. Internal audits are undertaken twice a year and audited externally every three years to monitor the design and implementation of the EMS against relevant environmental regulations and policies. Opportunities for continual improvement are also identified during the audits.

Safety management

The Airline Safety Review Committee (ASRC) has met monthly for the past 42 years to guide the management of safety in Cathay Pacific. The membership of the committee includes Directors and General Managers from key operational departments, heads of the Quality, Medical and Security departments, and safety managers from CX, HAECO and HAS. The ASRC is under direct governance of the Board Safety Review Committee which meets twice yearly and is supported by divisional Safety Action Groups, which meet monthly. The ASRC Chair reports to the Chief Executive after each meeting.

Cathay Pacific and Dragonair share the same goals and this is demonstrated by their adoption and implementation of similar safety policies and procedures.

We have a comprehensive list of safety performance objectives, indicators and targets that combine measures of safety, security, occupational health and safety, quality and contingency planning. These safety performance metrics are documented and reviewed on a monthly basis.

Sustainable purchasing management

We aim to ensure that all purchasing practices are governed by the highest professional and ethical standards. Our Airline Purchasing and Aircraft Trading Department manage most of the purchasing requirements for both Cathay Pacific and Our Purchasing Ethics Policy outlines our expectations from our purchasing staff, including compliance with anti-bribery regulations. Our approach to sustainable procurement has been to encourage our suppliers to improve on their sustainability practices through capacity building and sharing knowledge and best practice.

The teams in our Purchasing Department understand the need to use sustainable purchasing and responsible supply chain practices, wherever practical. As described in our 2009 SD Report, suppliers to Cathay Pacific must provide clear, accurate and appropriate reporting of their progress toward achieving our Supplier Code of Conduct objectives.

Human resources management

Human resources issues are managed by the respective departments in Cathay Pacific, Dragonair and our subsidiaries. At Cathay Pacific, this is headed by our Director Personnel and at Dragonair, by the Head of Personnel.

Our Corporate Code of Conduct sets out our principles for acting responsibly in the course of achieving our commercial success. The Code applies to all staff of Cathay Pacific and our subsidiaries, and includes issues related to business ethics, conflict of interest, procurement, insider trading, lobbying, bribery, environment, health and safety, and respect in the workplace. Comprehensive policies have been developed to support the Code of Conduct.

To ensure that staff members are aware of these policies and their implications they are communicated via appropriate channels including orientation and induction sessions and an intranet link provided in employee contracts.

We aim to ensure our employees are productive, competent and flexible and operate within a healthy environment. We ensure this through a series of training and development programmes. We also strive to manage people in a way that recognises diversity.

Community investment management

Our commitment to communities is a core part of our Sustainable Development Strategy. Whilst we have priority areas, we also have a flexible approach which enables us to respond to local needs and local priorities. As much as possible, we seek to engage our employees in all our community investment.

Through ongoing dialogue with our local communities, we can better understand and work to address issues and concerns relevant to their needs. In Hong Kong, we partner with local community groups, NGOs and other institutions, such as neighbourhood councils, integrated service centres, district councils, universities and schools.

Our community investment must be measured by the impact we make for the local communities. We are constantly examining international best practice and appropriate management tools to help us measure the impacts and evaluate outcomes of these initiatives.

Subsidiaries management

Our subsidiaries adopt similar policies, committees and management responsibility across all areas related to sustainable development, including environmental management, human resource issues, customer service, product responsibility and community engagement. Depending on the level of impact, our subsidiaries manage issues relevant to their business, including the development of goals, monitoring data through an environmental, health and safety database and training for staff.