1. INTRODUCTION
Enterprise Risk Management is defined as a process, affected by an entity’s Board of Directors, Management and other personnel, applied in a strategic setting and across the enterprise. It is designed to identify potential events that may affect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives.
2. PURPOSE
The Board of Directors (the Board”) via the Risk Management Committee (“RMC”) has constituted a Risk Management Working Group (the “Group” or “RMWG””). The purpose of the formation of this Group to assist the RMC in fulfilling its oversight responsibilities with respect to the Group's risk management processes, including assessment of key strategic and operational risks.
Also, to comply with the Malaysian Code of Corporate Governance (“MCCG”) and Main Market Listing Requirements (“Listing Requirements”) of Bursa Malaysia Securities Berhad (“Bursa”) that require listed companies to establish a risk management committee which is to be disclosed in the Annual Report and company’s official website.
3. COMMITTEE
(i) Composition of the Risk Management Committee (“the Committee” or “RMC”)
Based on the requirement of the MCCG, the majority of the Committee should comprise of Independent Director. In this case, Fibon Berhad (“Fibon”) shall be appointing two (2) Independent Directors and one (1) Executive Director.
The Committee may form and delegate authority to one or more subcommittees (including a Sub-Committee consisting of a single member), as it deems appropriate from time to time under the circumstances. Sub-Committee is formed on an ad-hoc basis to address or monitor a risk issue.
(ii) Criteria for selection
Members of the Committee need to have the will to deliberate issues, rationally, objectively and practically. Secondly, the Members shall not be worried of “witch-hunt” or suppression by fellow Directors in discharging their responsibilities.
4. REPORTING
(i) Reporting Line
The Committee shall report directly to Audit Committee.
(a) Frequency
Based on the Risk Management Working Group Charter, the Committee shall meet at least once annually. Meetings of the Committee may be called by the Chairman.
(b) Attendance
The Committee may invite to its meetings, or exclude in its discretion, any other director, Risk Management Working Group (“RMWG”), management of the Company and such other persons as it deems appropriate in order to carry out its responsibilities.
(c) Composition of RMWG
The Chairman and the members of the Risk Management Working Group (“RMWG”), have been identified from the Management as follows: Chairperson: Ms. Chong Hui Wen Members: a) Datin Pang Nyuk Yin b) Ms. Chong Sok Wei c) Mr. Mohamed Fahmi Bin Mohd Yusoff d) Mr. Lim Teck Cheong
6. FUNCTION
The Board has defined the roles and responsibilities of RMC. This is to ensure that risk management framework is in place with an adequate awareness and understanding of risk and control by the Management and risk owners in order to safeguard stakeholders’ interests and add value to the organisation.
As such, the Board has delegated the monitoring and reviewing of the risk management plan to the Committee and such other functions as it may deem fit.
(i) Role of Chairman
The Chairman will act as facilitator at meetings of the Committee and ensure that no Committee member, whether executive or independent non-executive, dominates the discussion, and that appreciates discussion takes places and that relevant opinion among Committee members are forthcoming.
The key roles and accountabilities of the Chairman include:
(ii) Role of Committee
The function of RMC in which their authority and responsibilities have been incorporated shall be as follows:
(iii) New Committee members
A new Committee member shall be briefed on the terms of their appointment, their duties and obligations and on the operations of the Group. Copies of the following shall be provided to the newly appointed Committee:
a. Board Charter;
b. Risk Management Charter;
c. Term of Reference of Auditor Committee;
d. Constitution;
e. Committees’ composition and terms of reference;
f. Latest business plans;
g. Latest annual reports and financial statements;
h. Organisation chart;
i. Site visitation.
7. AUTHORITY
(i) Executive Powers of the Committee
Independent Advisors
The Committee shall have the authority to engage such independent legal and other advisors as it deems necessary or appropriate to carry out its responsibilities. Such independent advisors may be the regular advisors to the Group. The Committee is empowered, without further action by the Board, to cause the Group to pay the compensation of such advisors as establish by the Committee.
Implementation of Controls
The Committee shall have the authority to instruct any of the Management to execute the corrective action plan proposed by the Risk Owners as long as the plan does not hamper/in conflict with the Organisation’s objectives. The Committee also have the authority to request the Risk Owner or the Management to report directly to the Committee of their action plan.
8. CORPORATE GOVERNANCE DISCLOSURE
The Committee guided by paragraph 15.26 of the Listing Requirements must ensure that the Board of Directors make a statement in its annual reports about the state of risk management and internal control of the company as a group (Risk Management and Internal Control Statement).
The Risk Management and Internal Control Statement would be concurrently reviewed and recommended by the Committee and Audit Committee, thereafter proposed to the Board of Directors for approval.
Disclosure of the statement is included in the Company's Annual report.
The Terms of Reference are available on the Company’s website.