KENANGA ANNUAL REPORT 2020

65 ANNUAL REPORT 2020 // KENANGA INVESTMENT BANK BERHAD PRESERVE AND ENHANCE STANDARDS OF ETHICS, INTEGRITY AND COMPLIANCE TOWARDS MANAGING RISKS ASSOCIATED WITH CONDUCT AND CULTURE • Group Code of Ethics and Conduct for Employees Kenanga Group’s morals and values are reflected through the behaviour and conduct of its employees. As such, in line with the goals of executing the Ethics Blueprint that was established in December 2018 and the holistic approach to inculcating an ethical culture as envisaged in the Ethics Governance Structure, the Group Code of Ethics and Conduct for Employees (which was formerly titled ‘The Group Code of Professional Ethics and Conduct for Employees’) was revamped accordingly. The Group Code of Ethics and Conduct for Employees was extensively revamped to introduce new provisions for clarity and to streamline existing provisions for enhancements and easier comprehension by employees. With the changes made, Kenanga Group continues to advocate the ideals for employees to observe so as to maintain the highest standards of professionalism, integrity and conscientiousness in all dealings, with fellow colleagues, as well as, with external parties. • Group Code of Conduct for Vendors The implementation and adoption of the Group Code of Conduct for Vendors that was issued in the first quarter of 2020 was executed throughout the year. The Group Code of Conduct for Vendors which specifies the expected business conduct and ethical practices of Kenanga Group’s vendors and service providers was incorporated or is to be made a fundamental clause in legal agreements signed between Kenanga Group and such parties. In addition, the Group Code of Conduct for Vendors was also made an essential element of Kenanga Group’s tender documents in order to provide potential vendors with prior notice on the principals and standards required of them in the performance of their work for Kenanga Group. • Anti-Fraud, Bribery and Corruption Fraud, bribery and corruption poses serious threats to organisations and their sustainability, as well as, the growth of the nation at large. This is particularly so for financial institutions such as Kenanga Group which plays an important role in the ecosystem of economic development. In line with Kenanga Group’s ‘zero tolerance’ approach to fraud, bribery and corruption, the Group Anti-Fraud, Bribery and Corruption Policy stipulates the principles and standards for identifying and preventing fraudulent activities, bribery and corruption, and it is to be complied by the Board of Directors, Senior Management, as well as, employees of Kenanga Group. Kenanga Group’s commitment to preventing fraud, bribery and corruption is further demonstrated by declaring the importance and emphasis on conducting its business with the right values on its publicly accessible website. Kenanga Group conducts all businesses in an honest and ethical manner and pledges to prevent fraud, bribery and corruption within Kenanga Group regardless of its form or manner. In addition, the Group Anti-Fraud, Bribery and Corruption Policy imposes requirements for employees to undertake the necessary due diligence exercise prior to engaging or forming any relationships with an external party. With the coming into effect of section 17A of the MACCA, Kenanga Group also undertook a timely and extensive review of the Group Anti-Fraud, Bribery and Corruption Policy to incorporate the requirements of new provision pertaining to offences by a commercial organisation. • Anti-Money Laundering and Counter Financing of Terrorism Kenanga Group is continuously devoted to enforcing a robust and effective Anti-Money Laundering, Countering Financing of Terrorism and Targeted Financial Sanctions ( “AML/CFT/ TFS” ) framework in adherence to all related laws, regulations, guidelines and industry best practices towards ensuring the management of Kenanga Group’s financial crime risks to mitigate potential regulatory and reputational risk. Fundamental reassessment of the approach to managing financial crime risks was conducted in lieu of the pandemic that has hit the entire world resulting in the emergence of new threats and vulnerabilities. These new challenges range from the changing structures of organised crime groups to the explosion in new technology, the increasingly interconnected global economy, rapid evolution of the AML/CFT regulatory landscape and modus operandi coupled with rapidly growing markets and complex business structures. At the heart of any effective strategy for protecting the business from exposure to financial crime is the implementation of meaningful financial crime policies which act as a clear marker of an organisation’s red lines and ethical standards. Without processes and behaviours that are aligned with high-level policies, there is a danger that such policies can be seen as mere window dressing or platitudes.