KENANGA ANNUAL REPORT 2018

57 ANNUAL REPORT 2018 ETHICS AND COMPLIANCE STATEMENT OUR PHILOSOPHY Kenanga Investment Bank Berhad and its Group of Companies (“ Kenanga Group ” or “ the Group ”) continues to propagate the application of ethics and integrity alongside compliance with regulatory requirements in order to deliver business value propositions. This corresponds with the heightened emphasis by the regulators to incorporate ethics and integrity in business practices as part of a corporate governance structure of an organisation. OUR APPROACH The commitment to enforce the philosophy of the Group was realised through the introduction of a new Group Business Ethics & Integrity (“ GBEI ”) Department within the Group Regulatory & Corporate Services (“ GRCS ”) Division effective 1 March 2019. GBEI serves to structure, plan and implement initiatives and efforts for purposes of management of ethics and integrity practices within the Group. With the introduction of GBEI, GRCS as the caretaker of the overall corporate governance matters of the Group now consists of the following departments: • Group Compliance; • Group Financial Crime Intelligence; • Group Prudential Supervision & Regulatory Affairs; • Group Legal; • Group Company Secretarial; and • GBEI. Due to the roles and responsibilities entail, it is only natural that GRCS independently reports directly to the Board of Directors (“ Board ”). OUR CONTINUOUS COMMITMENTS The introduction of GBEI came following the approval by the Board of Kenanga Investment Bank Berhad (“ KIBB ” or “ the Company ”) of the Ethics Blueprint (“ Blueprint ”) in December 2018. The Blueprint underlines a three (3)- year plan to establish a proper structure for effective management of ethics and integrity practices, which would complement the existing Compliance Structure of the Group. The Blueprint factored in the development in local regulatory requirements as well as, international practices and proposed for the following: • Establishment of GBEI GBEI will work towards establishment of a proper structure for management of ethics and integrity practices within the Group; i.e. Ethics Governance Structure (“ EGS ”). The roles of GBEI include ensuring the adoption of appropriate policies, procedures and practices to promote ethical culture in carrying out business and operational activities. Ultimately, GBEI serves to assist the Board, Senior Management and all employees to identify potential unethical and lack of integrity issues so that appropriate steps can be taken to prevent problems. It would also act as a resource center for employees seeking advice concerning standards of ethical business practices. • Appointment of Ethics Officer Appointment of an Ethics Officer is key to ensure effective execution of the functions of GBEI. The Ethics Officer would act as the main contact person internally with the Board and Senior Management, and externally with the regulatory and enforcement bodies in relation to ethics and integrity. Therefore, it is imperative that the Ethics Officer acquires the required skills and has a good standing not only within the Group but also within the capital markets industry. • Three (3)-Year Plan to Establish Ethics Governance Structure The three (3)-year plan outlines the strategic planning for proper establishment of an EGS within the Group, which would complement the existing compliance structure. This essentially serves as an acknowledgement by the Group on the importance of ethics and integrity practices in carrying out business and operational activities.