Page 175 - Bank-Muamalat_Annual-Report-2023

ANNUAL REPORT 2023
GOVERNANCE

STATEMENT ON

RISK MANAGEMENT

The Bank adopts a prudent approach towards risk management and has emplaced appropriate control frameworks to
support sustainable business growth. Key control mechanisms include timely identification and escalation of current and
emerging risks and enhanced oversight to ensure growth is within the Bank’s established risk appetite and driven by
risk-informed decision-making.

BOARD RESPONSIBILITY

The Board plays a vital role in providing risk oversight and determining the Bank’s risk appetite with regards to the levels and
types of risk that the Bank is willing to take towards achieving its strategic objectives. It is therefore committed to its overall
responsibility in implementing and ensuring that a sound risk management and internal control system are maintained within
the Bank.
The Board’s responsibilities include approving and reviewing the adequacy and effectiveness of the risk management
and internal control systems that are being used in identifying, assessing, monitoring and mitigating risks.
The control structures and processes, which incorporate elements of financial, operational, risk and compliance management,
have been instituted throughout the Bank. From time to time, the control structure and processes are reviewed to suit the
changes in the business environment.

MANAGEMENT RESPONSIBILITY

The Management is responsible for developing and implementing all policies and procedures approved by the Board
as well as identifying, evaluating, measuring and monitoring risk exposures. The roles of the Management include,
but not limited to:
• identify and evaluate the risks relevant to the Bank’s business and achievement of its business objectives and strategies;
• design and implement risk management frameworks in accordance to the Bank’s strategies and risk appetite;

• formulate relevant policies and procedures to manage risks in accordance to the Bank’s strategic vision and overall
risk appetite; and

• report in a timely manner to the Board on any changes to the current risks or of any emerging risks and the appropriate
actions taken.

RISK GOVERNANCE
The Bank’s risk governance and oversight structure outlines the accountabilities as well as roles and responsibilities for
the management of risk. The Board plays a crucial role in establishing a strong risk management structure and provides
oversight for overall risk governance to ensure that the Bank’s strategic objectives are supported by sound risk strategy
and an effective risk management framework. To carry out its risk and control oversight, the Board is supported by the
Board Risk & Compliance Committee (BRCC) that directly oversee matters relating to risk. The BRCC updates the Board on
monthly basis on the key deliberations and decisions.

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