i 6:49 Business: Ethics, Governance & Risk Answer Introduction Risk managements a crical function for companias, particle for thos listed on the stock exchange thet operate in complex and dynamic environments. The board ‘of droctrs of alisod company is sponsible fr oversoving the company’s risk management framework and ensuring tha itis effective in identifying and mieating risks that may affect the company’s capacity to achieve its goals. This responsiblity is based on the ethical pnciple of the company’s fiduciary duty to actin the hast interests of ts stakeholders, Including shareholders, employees, customers, ‘Suppliers, and the wider communi. We wit use Hindustan Unilever Limited (UL), ‘one ofthe fop S00 companies ited onthe National Stock Exchange (NSE) by market capitalization, as an example tollustate the Key inivatves taken by the ‘company to manage one financial sk and one non-francial skin the fiscal year ani Concept and Application “The ethical principle that ques risk management is that itis on othe business to recognise, valuala, and con the risks related to is actives. This rulo is based fon the board of directors fiduciary responsibly to act in the organization's and its stakeholders best nieve, induding sharehelders, staff members, clients, vendors, land the general pubic For ousinesses, risk management is an essential task, ‘especialy for ited fms that oporato in complicated and dynamic contests. A litod ‘company's board of dirctors is in charge of reviewing the company's isk management framework and making sure itis sucessful at detecting and managing fick that might have an impact onthe company's capacity to fll its goals ‘Toillustate how a sted company’s board manages energies risk, we can take the ‘example of Hindustan Unievor Limited (HUL), one of the top 800 comparies listed ‘on the Natonal Stock Exchange (NSE) by market capitalization HULis a subsiiary ‘of Uniever, multinational eansumer goods company headquartered In London, UK HUL's board of sirectors has estabished a rabust sk management framowork to identify, assess, and manage risks associated wih is operalions. This frameworks ‘agnad with ine principles of os corparate governance and is designad 0 ensure that the company operatos in a sustainable and sponsible manner. Financial Risk Management Initiate: ‘One ofthe key financial risks that HUL faces i foreign exchange tek, given its significant exposure to foreign currencies due tots interational operations. To ‘manage this risk, HUL has implemented a comprehensive hedging program that includes the use of forward contracts an options to mfigate the impact of curency fluctuations on is financial results. Inits Annual Report for FY2021-22, HUL statas tha thas continued o implement {his hedging program to manage is exposure to foreign curency sk. Specialy, ‘the company has hedged its foreign curroncy exposures up to 12 menths ahoad using a combination of foward contracts and options. HUL's board af rectors has reviewed and approved tis hedging program, which isimplementad by the ‘company’s treasury teem under the guidance ofthe Boar's rsk management commitee Nom Financial Risk Management Initiative “Another ky risk that HUL fa00s is reputational isk. von its strong brand identity 0/6 100% 4