This Statement has been prepared in line with the Statement on Risk Management & Internal Control: Guidelines for Directors of Listed Issuers. The Board is committed and acknowledges its responsibility to oversee the system of risk management and internal controls within the Group, including reviewing the adequacy, integrity and effectiveness to safeguard shareholders’ investments and the Group’s assets. BOARD RESPONSIBILITY The Board affirms its overall responsibility and oversight in establishing a sound risk management and internal controls systems in the Group as well as reviewing its adequacy, integrity and effectiveness. Such a system is designed to manage the Group’s risk appetite within the established risk tolerance set by the Board and the Management, minimising the risk of failure rather than total elimination of risks to achieve the Group’s business objectives. Acknowledging that the system only provides reasonable and not absolute assurance against the occurrence of any material misstatement, loss or fraud, controls and processes have been put in place to contain the limitations inherent in the system such as human error and potential impact of external events beyond the Management’s control. The Board constantly keeps abreast with developments in areas of risk and governance. The Board is assisted by the Board Risk Committee (BRC) which has been delegated with primary oversight responsibilities on the Group’s risk management and internal controls systems. The Board is also supported by the Board Audit & Examination Committee (BAEC) which provides independent oversight of the Group’s reporting process and internal controls systems that facilitates appropriate checks and balances within the Group. The summary of Board Committee report is provided by the Chairman of the Board Committees to keep the Board informed of their work, key deliberations and decisions on delegated matters. The Board is of the view that the internal controls framework that has been instituted throughout Bank Islam is sufficient to safeguard the shareholder’s investment, customers’ interest and Bank Islam’s assets. The governance structure established further ensures that there is effective oversight of risks and internal controls in the Group at all levels. The Board remains responsible for the governance of risk and internal controls as well as all actions of the Board Committees with regard to the execution of the delegated oversight responsibilities. Reviews are continuously carried out to ensure effectiveness of the system. The Group regularly reviews and improves all controls, processes and response plan arising from the challenges of the economic uncertainties, evolving regulatory landscape, climate change impact as well as other emerging risks that may arise. The Group has established processes to ensure the adequacy and integrity of its internal controls systems and manages the existing and potential risks with control and governance processes. INTRODUCTION Pursuant to Paragraph 15.26(b) of the Listing Requirements of Bursa Malaysia Securities Berhad, the Board of Directors (Board) is pleased to provide the following Risk Management and Internal Controls Statement (the “Statement”) which outlines the nature and scope of risk management and internal controls of the Group during the financial year ended 31 December 2023. 231 1 2 3 4 5 6 7 8 9 www.bankislam.com ACCOUNTABILITY Statement on Risk Management and Internal Control
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