Page 364 - Bank-Muamalat-AR2020

362 BANK MUAMALAT MALAYSIA BERHAD About Us Our Leadership Our Strategy
ANNUAL REPORT FY2020

BASEL II
PILLAr 3 DISCLOSurE

3.0 rISk MANAGEMENT (CONT’D)
The Board’s primary oversight role is to understand the risks undertaken by the Bank and ensure that these risks are properly
managed. While the Board is ultimately responsible for the Bank’s management of risks, it has entrusted the Board Risk
Management Committee (“BRMC”) to carry out specific risk management oversight functions on its behalf.
BRMC, which is chaired by an independent director of the Board, is a board-level committee that oversees the overall
management of risks and deliberates on risk-related issues and resolutions. The BRMC, acting on behalf of the Board, also
ensures that the appropriate processes, resources, policies and guidelines are in place to manage the Bank’s risks.

In addition, the Board is also supported by the Shariah Committee (“SC”), which was set up as an independent external body
to decide on Shariah issues and to simultaneously assist towards risk mitigation and compliance with the Shariah principles.
The execution of the board-approved risk strategies and policies is the responsibility of the Bank’s management and these
functions are also exercised under a committee structure. Heading the management-level risk committees is the Executive Risk
Management Committee (“ERMC”), which is chaired by the Chief Executive Officer (“CEO”). The ERMC focuses on the overall
business strategies and the Bank’s day-to-day operations in respect of risk management.

Other management-level risk committees are set up to oversee specific risk areas and its related control functions as described
below:

Table 6: risk Committees & Functions

Committee Objective
Asset & Liability working Committee ("ALCO") To ensure that all strategies conform to the Bank’s risk appetite and
levels of exposure as determined by the BRMC. These include areas of
capital management, funding and liquidity management and market
risk.
Credit Committee ("CC") To manage the direction of the Bank's financing exposures (business
and consumer). These include authority to decide on new and/or
additional exposures and review the direction of existing exposure.
Investment Committee ("IC") To manage the Bank’s investments and decide on new and/or
additional investment in securities and/or other Treasury investment-
related activities.
Operational risk Management Committee To ensure effective implementation of Operational Risk Management
("OrMC") Framework.
A dedicated and independent Risk Management Department (“RMD”) supports the above committees by carrying out the day-
to-day risk management functions, drafting of risk-related policies and procedures, and providing reports, risk analyses and
recommendations for the Management’s and the Board’s decision-making.

The Bank’s risk governance structure is based on the principle that each line of business is responsible for managing the risk
inherent in their undertaken business activities. The line managers are therefore responsible for the identification, measurement
and management of risks within their respective areas of responsibility.