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GOVERNANCE
Axiata Group Berhad | Annual Report 2016
097
The implementation of risk management activities encompasses both
corporate and subsidiary (at Operating Company or “OpCo”) levels where
OpCos have similar risk structures within their jurisdiction. To ensure the
operationalisation of risk management processes and clear accountability at
the OpCo level, risk committees comprising of their Chief Executive Officer
(CEO) as Chair, and selected senior management members are set up in each
OpCo. At the same time, a risk focal person (“Risk Champion”) is appointed
to provide timely risk updates and act as the key liaison with GRMD. Events
which may materially impact the Group’s financial position and reputation will
be escalated to the GRMD for appropriate action. At the same time, the Risk
Champion would provide recommendation on the adoption of appropriate
mitigation steps and provide quarterly updates to their respective OpCo
BAC on the action taken. To further strengthen accountability at the
management level, the CEO or Chief Financial Officer (CFO) of each OpCo is
required to present their risk profile at the GRMC on a rotational basis. This
structure provides the Group with the necessary detailed knowledge from
OpCos, thus allowing the Board to have a comprehensive view of principal
risks and mitigation activities across the board and ensure accountability by
OpCos in managing their risks. As and when new OpCos are established,
GRMD will work closely with the new management team in the set-up of
the risk function.
The Group faces many risks and uncertainties which we mitigate and
manage through various risk management strategies, actions and controls.
These risks vary widely with some threatening our business model, future
performance and financial standing of the business. There may be risks that
are beyond the Group’s control, or presently unknown or currently assessed
as insignificant, which may later prove to be material. Nonetheless, we aim
to mitigate the exposures through appropriate risk management strategies
and internal controls as much as possible.
Principally, the Group’s key risk factors are categorised into the following
eleven categories:
•
Financial Risk
•
Market Risk
•
Regulatory Risk
•
Cyber Risk
•
Operational Risk
•
Geo Political Risk
•
Strategic Risk
•
Investment Risk
•
People Risk
•
Technology Risk
•
Governance and Integrity Risk
A write-up of the key risks faced by the Group are listed in Appendix 1 of
this statement.
The following key internal control structures are in place to assist the Board
to maintain a proper internal control system.
Key Internal Control Structures of the Group
1.0 Control Environment
The control environment sets the tone for the Group by providing
fundamental discipline and structure. Key elements of the Group’s
internal control systems include:
1.1 Integrity and Ethical Values
•
Code of Conduct and Practice
The Senior Management and Board set the tone at the
top for corporate behaviour and corporate governance. All
employees of the Group shall adhere to the policies and
guidelines as set out in the Code of Conduct of the Group
which sets out the principles to guide employees in carrying
out their duties and responsibilities to the highest standards
of personal and corporate integrity when dealing within the
Groupandwithexternalparties.TheGroup’sCodeofConduct
covers areas such as compliance with respect to local laws
and regulations, integrity, conduct in the workplace, business
conduct, protection of the Group’s assets, confidentiality,
conflict of interest and anti-competition practices. In 2016,
various initiatives including ongoing enforcement of the Gift
Policy, consequence management on violation of integrity
and values and Group Recognition Event to inculcate and
encourage the appropriate behaviours continued.
•
Guidelines on Misconduct and Discipline
Guidelines are in place for handling misconduct and
disciplinary matters. These guidelines govern the actions
to be taken in managing the misconduct of employees
who breach the Code of Conduct and Practice or do not
comply with the expressed and implied terms and conditions
of employment. The Code of Conduct and Practice has
also been extended to contractors and suppliers of the
subsidiaries.
1.2 Board Committees
(a) Board
Clear roles of the Board are stated under the Statement of
Corporate Governance section of this Annual Report.
(b) Board Committees
To promote corporate governance and transparency,
in addition to the Board, the Group has the BAC, Board
Nomination Committee (BNC) and Board Remuneration
Committee (BRC) collectively ‘Board Committees’ in place.
These Board Committees have been established to assist the
Board in overseeing internal control, Board effectiveness, and
nomination and remuneration of the Group’s key positions
and directors. The responsibilities and authority of the Board
and Board Committees are governed by a clearly defined
Terms of Reference (ToR).