The purpose of the Enterprise Risk Management, Safety, and Security Committee of the Board of Directors (the “Committee”) is to assist the Board in the oversight of the California Water Service Group’s (“Company”) Enterprise Risk Management, Safety, and Security programs, including those related to physical safety and security, to ensure adequate safeguarding of all Company assets.
II. Committee Membership
The Committee will consist of at least three independent directors appointed by the Board on the recommendation of the Nominating/Corporate Governance Committee. Each Committee member shall be selected based upon their related areas of expertise in areas that can aid the Company in improving performance and mitigating risk, as determined by the Board. The Board will designate a Committee Chair(s).
The Committee will meet as often as may be deemed necessary or appropriate, in its judgment, and at such times and places as the Committee or its Chair determines. The majority of the members of the Committee constitutes a quorum. The Committee will report no less than annually to the full Board, inclusive of Audit Committee, with respect to its activities.
IV. Outside Advisors
The Committee will have the authority to retain, at the expense of the Company, such outside counsel, experts, and other advisors as it determines appropriate to assist it in the full performance of its functions.
V. Responsibilities of the Committee
The Committee provides an oversight function for risk management, asset protection, and safety. The Company’s management retains responsibility for assuring the Company’s compliance with applicable laws and regulations and executing the Company’s Enterprise Risk Management program. In fulfilling these responsibilities, management is ultimately accountable to the Committee and the Board of Directors. To fulfill its responsibilities, the Committee shall:
A. Enterprise Risk Management
- Discuss with management the identification of principal risks arising out of the Company’s business, including Operations and Facilities; review the effectiveness of the process used to identify and analyze major risks.
- Review with the Company the steps it has taken to manage or mitigate major, identified risks or exposures, the safeguarding of assets, and the Company's policies and procedures for risk management and asset protection.
- Discuss with the Company current and emerging matters that may affect execution of the business, strategy, operations, performance, or public image of the Company.
- Review the Company’s goals, programs, policies, and practices and the effectiveness of such programs with respect to promoting a strong culture of safety for employees and protecting the public.
- Review the Company’s Emergency Preparedness and Business Continuity Risk program, including emergency response training, tabletop exercises, and other such coordinated activities conducted with the appropriate authorities.
- Review the Company’s goals, programs, policies, and practices and the effectiveness of such programs with respect to physical safety and security and the protection of Company assets.
- Review the key elements of the Company’s security programs and the nature and extent of preventive, detective, and remedial controls and processes that management uses to protect the Company assets.
- Review the Company’s goals, programs, policies, and practices and the effectiveness of such programs with respect to environmental contamination risk, natural or human caused disaster risk and water quality risk.
- Review the key elements of the Company’s programs and the nature and extent of preventive, detective, and remedial controls and processes that management uses to address such risks.
E. Responsibilities Applicable to All Programs
- Review and report to the Audit Committee and the Board on the Company’s compliance programs with respect to legal and regulatory requirements in the areas of Enterprise Risk Management, Safety, and Security.
- Oversee the Company’s other compliance programs for Enterprise Risk Management, Safety, and Security, as well as the Company’s policies and procedures for monitoring compliance.
- Make such recommendations to management and the Board with respect to any of the above matters as the Committee deems necessary or appropriate.
VI. Annual Performance Evaluation and Other Matters
The Committee will annually evaluate its performance and the adequacy of its charter and recommend changes to the Board as appropriate.
Board Affirmed: January 25, 2023