KENANGA INVESTMENT BANK BERHAD INTEGRATED ANNUAL REPORT 2024 WE ARE KENANGA OUR SUSTAINABILITY APPROACH LEADERSHIP STATEMENT HOW WE ARE GOVERNED FINANCIAL STATEMENTS SHAREHOLDERS’ INFORMATION ADDITIONAL INFORMATION OUR VALUE CREATION APPROACH 45 44 GOOD GOVERNANCE WHY IT MATTERS Upholding the highest standards of corporate governance and ethical business conduct reinforces our commitment to integrity, transparency, and compliance. We strengthen stakeholders’ trust and drive sustainable growth by fostering a culture of accountability as we maintain zero tolerance for financial crimes. Upholding the highest ethical standards of integrity in business practices by ensuring ethical conduct, implementing anticorruption measures and fostering a transparent corporate culture. Key Risks: Non-compliance with evolving regulations can result in legal penalties, fines, and reputational damage. Weak governance structures risk financial instability and diminish stakeholder trust. Unethical practices undermine relationships and operational efficiency. Key Opportunities: Strong regulatory compliance safeguards reputation, mitigates risks, and attracts investors. Effective governance, with clear accountability, fosters trust and supports growth. Ethical business practices enhance stakeholder confidence and organisational resilience. Key Activities: • Kenanga Investors Group (“KIG”), our asset and wealth management arm, have further strengthened its ESG-related responsibilities across all senior management roles and key functions, ensuring a more structured and accountable approach to sustainability integration. • Strengthened Group Procurement Policy and implemented ESG assessments for suppliers, reinforcing our commitment to responsible sourcing and ethical business conduct. GOOD BUSINESS CONDUCT WHY IT MATTERS Fostering a culture of compliance that empowers our employees to uphold high standards of integrity and vigilance, which is a cornerstone of our good governance practices. Ensuring adherence to local and international laws, regulations and standards by maintaining compliance in all operations, from financial reporting to governance practices, thereby reducing the risk of legal or regulatory breaches. Key Risks: Regulatory non-compliance can incur fines, reputational damage, and loss of trust from regulators, investors, and clients. Additionally, a lack of understanding of good governance practices may result in poor decision-making and accountability gaps. While weak financial crime policies further increase legal risks and undermine stakeholder confidence. Key Opportunities: Building regulatory trust through strong compliance reinforces credibility with regulators and investors. Promoting governance awareness fosters ethical practices and accountability among stakeholders. Implementing robust financial crime measures further protect the organisation, ensuring security and strengthening trust. Key Activities: • Organised our 8th consecutive Fraud Awareness Week (“FAW”), in collaboration with the Association of Certified Fraud Examiners. The event attracted over 1,850 participants, including internal teams and representatives from regulatory bodies, public listed companies, professional associations, and vendors, such as Bursa Malaysia, the Securities Commission Malaysia, and Petroliam Nasional Berhad. Additionally, international teams from Singapore, Indonesia, India, South Africa, and Belgium joined the event. • Hosted the inaugural Compliance Awareness Week, themed ‘Navigating Compliance Together – Embrace, Empower & Excellence’, with nearly 200 employees attended, where keynote speeches and interactive game sessions designed to embed compliance as a core value within our corporate culture. • Hosted the 9th Annual Regulatory Seminar where 94% of our employees achieved a score of 80% or higher. REGULATORY COMPLIANCE GOOD GOVERNANCE Refer to pages 27 to 40 of our Sustainability Report 2024 for more information on our approach and progress on Good Governance. WHY IT MATTERS Risk management is crucial as businesses face increasingly complex and interconnected challenges, including operational, financial, regulatory, and sustainability-related risks. At Kenanga, we take a proactive approach to identifying, assessing, and mitigating potential threats, while strengthening our resilience. As stakeholders’ expectations evolve, we remain committed to improving our risk management practices to ensure long-term success and sustainability. Identifying, assessing and managing potential risks—such as strategic, operational, financial and ESG-related risks which could impact Kenanga’s business operations, financial stability, or reputation, ensuring resilience and long-term sustainability. Key Risks: Ineffective risk governance—including weak internal controls, non-compliance, or failure to uphold ethical standards—can lead to legal penalties, reputational damage, and financial loss. The failure to integrate ESG risk considerations can lead to increased regulatory scrutiny, asset devaluation, and a loss of investor and public confidence. Key Opportunities: Leveraging technological solutions for stronger compliance and cybersecurity enhances risk detection. By incorporating ESG risk factors into their risk management strategies, organisations are better equipped to mitigate potential disruptions and enhance stakeholder confidence. Additionally, embracing digital innovation, diversifying financial products, and implementing effective crisis management strategies foster resilience and drives sustainable growth. Key Activities: • Conducted annual account reviews and regularly monitored client account activities through an impairment trigger assessment. This process was designed to detect early indicators of deteriorating creditworthiness, allowing for timely and proactive intervention. • Established a lending and investment assessment process that incorporated ESG considerations to identify and evaluate environmental, social, and governance risks in our business activities. The results of this assessment offered a comprehensive view of our clients’ climate profiles and the related risk exposures RISK MANAGEMENT
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