KENANGA ANNUAL REPORT 2019

H OW W E A R E G O V E R N E D 1 2 3 4 5 67 6 7 MAINTAINING A HIGH LEVEL OF CORPORATE GOVERNANCE With a series of corporate governance codes and guidelines issued in recent years by the regulators and authorities to improve best practices aimed at strengthening Malaysian corporate culture, GRCS has taken steps to drive and transform the Group’s governance framework to be in line with the Policy Document on Corporate Governance issued by BNM on 3 August 2016; the Malaysian Code on Corporate Governance 2017 issued by the SC effective 26 April 2017; and the Third (3 rd ) Edition of the Corporate Governance Guide issued by Bursa Malaysia Berhad on 14 December 2017. With regard to BNM’s Policy Document on Corporate Governance, GRCS in collaboration with Group Human Resource, has conducted a gap analysis on KIBB’s corporate governance standards and practices, Board operations, as well as, remuneration framework. Arising from the gap analysis, certain action plans have been implemented, thus enhancing KIBB’s status of compliance to the 81 standards stipulated in the Policy Document on Corporate Governance from 89% to 95%. The balance of the standards is on track for implementation in accordance with the timeline set by BNM. Following the issuance of the SC’s inaugural Corporate Governance Monitor 2019 Report (“ CG Monitor ”) that was launched on 6 May 2019, the Board had taken note of all the findings and observations highlighted in the CG Monitor and is committed to ensuring meaningful and enhanced quality of the Group’s to disclosures of its current key focus areas and future priorities in relation to corporate governance. OUR FOCUS AND STRATEGIES FOR 2020 • Preserve Regulatory Compliance, Ethics and Integrity Standards The Group has always prioritised the importance of meeting and preserving the regulatory, ethics and integrity standards that have been set not only by the regulators, but also internally which is benchmarked against global best practices. These standards reflect the Group’s commitment to create an environment that encourages and supports its employees to behave in a compliant and ethical manner while at the same time, instilling a sense of shared accountability. The Group will continue its efforts to have in place a robust framework to meet compliance, ethics and integrity goals and work on raising employee awareness in this regard. • Manage Reputational, Culture and Conduct Risks The Group recognises that inculcating a culture of compliance and managing conduct risks enhances its reputation among the regulators and clients. In this regard, having a common frame of reference serves as a unifying force across different functions, departments and divisions across the Group to ensure that everyone in the organisation are collectively responsible for the management of risks that are associated with the business and operations. We continue to administer, develop and emphasise on strategies to manage reputational, culture and conduct risks and aim to always be ahead of the curve. • Digitalising Compliance Functions The Group remains up-to-date as compliance requirements and regulations are constantly tweaked and updated and we anticipate that the coming years will continue to see an ever-increased focus on compliance by the regulators as more services are offered on the digital landscape. In order to effectively manage current and upcoming compliance challenges, we implement a work-system that is both flexible and adaptable and strategise to quickly adopt changes that are necessary particularly in areas where technology can be used. We will continue to innovate and ensure that we leverage on developing technology in the area of compliance. • Manage Threat of Financial Crime More reviews on AML/ CFT compliance shall be carried out to identify any potential AML/ CFT threats and further enhance the detection, monitoring and reporting of suspicious activities. The Group also consistently recognises and supports the implementation of stricter regulatory requirements to keep up with the evolving AML/ CFT threats and to regulate conduct of business and financial crimes while ensuring maintenance of integrity in the capital market industry. ETHICS AND COMPLIANCE STATEMENT