Page 161 - Bank-Muamalat_Annual-Report-2023

ANNUAL REPORT 2023
GOVERNANCE

The Remuneration Policy for Senior Management and 2 Review and Approval
Material Risk Takers epitomises Bank Muamalat’s
commitment to robust risk governance. It underscores The Remuneration Committee will diligently review
the alignment of remuneration practices with risk appetite, and sanction the list of potential MRTs, ensuring
the cultivation of a sound risk culture, and the advancement objectivity and consistency across the business units.
of long-term organisational interests. Bank Muamalat remains
steadfast in its pledge to uphold transparent, equitable, 3 Notification
and sustainable remuneration practices, reflective of its Bank Muamalat will notify the employees identified as
dedication to diversity and inclusion, corporate social MRTs, clarifying the rationale behind their inclusion in
responsibility, and environmental stewardship. the list, and the impact of assuming the role on their
compensation and performance evaluation.
ADDITIONAL INFORMATION
Regular Review
4
Identifying Material Risk Takers (MRTs) stands as a pivotal Bank Muamalat will review the list of MRTs regularly,
facet of Bank Muamalat’s remuneration policy. Bank Muamalat accommodating changes in employees’ roles,
will delineate MRTs based on the following criteria:
decision-making authority, compensation, and
Job Function performance. Any modifications to the MRT list will
necessitate approval from the Remuneration Committee.
Bank Muamalat will discern job roles that wield a substantive
Bank Muamalat is committed to maintaining a transparent,
influence on its risk profile, encompassing domains such as risk
objective, and uniform process for identifying MRT across
management, investment banking, trading, and financing.
all business units. Additionally, Bank Muamalat will
Decision-Making Authority ensure that the list of MRTs undergoes regular review
and approval by the Board Nomination & Remuneration
Bank Muamalat will identify employees vested with Committee, with any changes promptly and transparently
decision-making prerogatives over critical areas that has communicated to the affected employees.
potential material impact on Bank Muamalat’s risk profile,
including credit approvals, investment decisions, risk
assessments, and trading positions. PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT

Compensation Board Accountability
i. Board Audit Committee (BAC)
Bank Muamalat will identify employees receiving
compensation levels akin to senior management, encompassing
The BAC has effectively fulfilled their obligations
both fixed and variable elements such as bonuses, stock
and responsibilities as stipulated in the Terms of
options, and other incentives.
Reference (TOR), and has efficiently assisted the Board
in making informed decisions related to quarterly
Performance
results, year-end financial statements, evaluation of
Bank Muamalat will identify employees whose performance external auditors, and the internal audit function.
correlates with Bank Muamalat’s risk profile, such as traders
contributing significantly to revenue generation or risk The BAC conducts an annual review of the suitability,
managers overseeing risk management activities. objectivity, and independence of the external auditors,
and the results are presented to the Board for
Bank Muamalat will establish a methodical process for approval.
identifying MRTs, meticulously aligned with regulatory
The BAC Report provides an overview of Bank Muamalat’s
mandates and industry benchmarks. This process will entail the
internal control systems and financial reporting adequacy
following steps:
and integrity, adherence to internal policies and
Identification procedures, and compliance with external rules and
1 regulations.
Rigorous evaluation will be conducted to identify
employees meeting the criteria for MRTs, considering
job function, decision-making authority, compensation,
and performance metrics.

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