112 Additional Information We Are Kenanga Leadership Message Our Sustainability Approach How We Are Governed Financial Statements Shareholders’ Information STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL Management Committees (“MC”) are established to oversee specific responsibilities based on defined terms of references. MC meetings are held regularly to ensure that business operations are executed in accordance with approved strategies, policies and business directions. The MCs are responsible for, amongst others: • reviewing the actual performance against expectations and budget; • addressing any internal control issues with the AC, GBRC, GBDITC, GNC, Employees’ Share Scheme Committee (“ESSC”), GIA, regulators and the external auditors; and • addressing any matters arising from the meetings of the Board, AC, GBRC, GBDITC, GNC and the ESSC; and ensuring that actions are taken in relation to these matters. Risk Management Process and Infrastructure The risk management process is a combination of both bottom-up and top-down approaches to facilitate decision making based on available information known at the time and creating opportunities to refine inputs when new information is available. In addition to establishment of risk policies, tools and methodologies to identify, quantify and manage the risks, Group Risk Management is also responsible for establishing the risk measurement and monitoring process to ensure that the Group’s risk profile and portfolio concentration are reported to the various risk committees on a regular basis. Internal Policies and Procedures Policies and procedures which set out standard day-to-day operations and managing risks are formulated based on current regulatory requirements and industry best practices. The adequacy and compliance with regulatory requirements of the policies and procedures are assessed by independent control functions such as risk management, compliance and audit, prior to obtaining approval from the Board or relevant MCs. Existing policies and procedures are reviewed regularly to ensure improvements and in consideration of emerging or changing risks profile, new products or services as well as new or updated regulatory requirements. Annual Business Plans and Budgets The Board reviews and approves the business plans and budgets which are developed in line with the Group’s strategies and risk appetite. Actual performances against the approved budgets are escalated to the Management and Board on a monthly basis allowing responses and corrective actions to be taken. Human Capital Management The organisational structure, which is aligned to business and operational requirements are led by Heads of Departments with accountability in place. Human Resources’ policies and procedures are reviewed regularly to ensure they remain relevant to manage operational and people related risks. There are regular trainings and updates for employees on requirements/ guidelines of BNM, Bursa Securities and the SC, as well as on the importance of corporate governance, risk management and internal control. Various awareness programmes on operational risks, ethics and fraud are also conducted regularly. Extensive screenings of employees’ background are conducted on hiring, as well as annually, and appropriate actions are taken on negative findings. Key Performance Indicators are cascaded to each employee annually in alignment to the Group and Division goals and objectives, and performance appraisals are conducted based on the achievement of the set targets. Management’s Compensation and Rewards is based on Pay for Performance principle. Compensation of Material Risk Takers and Other Material Risk Takers are reviewed annually by the GNC and Board. Employee misconducts are managed based on established Consequence Management Framework and the disciplinary policies.
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