Page 167 - Bank Muamalat_AR24

ANNUAL REPORT 2024 1 2 3 4 5 6 Governance 7 8 165

The Remuneration Policy for Senior Management and Notification
Material Risk Takers epitomises BMMB’s commitment to
robust risk governance. It underscores the alignment of Bank Muamalat will notify the employees identified as
remuneration practices with risk appetite, the cultivation MRTs, clarifying the rationale behind their inclusion in
the list, and the impact of assuming the role on their
of a sound risk culture, and the advancement of long-term compensation and performance evaluation.
organisational interests. BMMB remains steadfast in its pledge
to uphold transparent, equitable, and sustainable remuneration Regular Review
practices, reflective of its dedication to diversity and
inclusion, corporate social responsibility, and environmental Bank Muamalat will review the list of MRTs regularly,
stewardship. accommodating changes in employees’ roles, decision-making
authority, compensation, and performance. Any modifications
to the MRT list will necessitate approval from the Remuneration
ADDITIONAL INFORMATION
Committee.
Identifying Material Risk Takers (MRTs) stands as a pivotal Bank Muamalat is committed to maintaining a transparent,
facet of BMMB’s remuneration policy. BMMB will delineate
MRTs based on the following criteria: objective, and uniform process for identifying MRT across all
business units. Additionally, Bank Muamalat will ensure that
Job Function the list of MRTs undergoes regular review and approval by
the Remuneration Committee, with any changes promptly and
BMMB will discern job roles that wield a substantive transparently communicated to the affected employees.
influence on its risk profile, encompassing domains such as
risk management, investment banking, trading, and lending.
PRINCIPLE B: EFFECTIVE AUDIT AND RISK
Decision-Making Authority MANAGEMENT
BMMB will identify employees vested with decision-making Board Accountability
prerogatives over critical areas that has potential material
impact on BMMB’s risk profile, including credit approvals, i. Board Audit Committee (“BAC”)
investment decisions, risk assessments, and trading positions.
The Board Audit Committee (BAC) has effectively fulfilled
Compensation their obligations and responsibilities as stipulated in the
Terms of Reference (TOR), and has efficiently assisted
BMMB will identify employees receiving compensation levels the Board in making informed decisions related to
akin to senior management, encompassing both fixed and
variable elements such as bonuses and other incentives. quarterly results, year-end financial statements, evaluation
of external auditors, and the internal audit function.
Performance
The BAC conducts an annual review of the suitability,
BMMB will identify employees whose performance correlates objectivity, and independence of the external auditors,
with BMMB’s risk profile, such as traders contributing and the results are presented to the Board for approval.
significantly to revenue generation or risk managers overseeing
risk management activities. The BAC Report provides an overview of Bank
Muamalat’s internal control systems and financial
BMMB will establish a methodical process for identifying reporting adequacy and integrity, adherence to internal
MRTs, meticulously aligned with regulatory mandates and policies and procedures, and compliance with external
industry benchmarks. This process will entail the following rules and regulations.
steps:
ii. Risk Management and Internal Controls
Identification
The Board, supported by its committees, operates
Rigorous evaluation will be conducted to identify within a framework of prudent and effective controls
employees meeting the criteria for MRTs, considering job in the interests of shareholders, customers and
function, decision-making authority, compensation, and other stakeholders. The Group’s Governance of Risk
performance metrics. Management and Internal Controls ensures the safety
and soundness of the Group and its key entities. This
Review and Approval
is achieved through a robust governance structure
The Remuneration Committee will diligently review and designed to deliver a well-managed business with
sanction the list of potential MRTs, ensuring objectivity and effective decision-making, good procedures and strong
consistency across the business units. controls.