Affin Bank Berhad | Annual Report 2020

The Bank’s remuneration policy considers the role of each staff and has set guidance on whether they are under Key Senior Management, Other Material Risk Taker (OMRT) or other employees category. The objectives of the Remuneration Policy is to ensure that the remuneration system of the Bank:- i. Rewards individuals for the achievement of the Bank’s objectives and motivates high levels of performance; ii. Rewards exceptional performance by individual through the Performance Management System; iii. Allows the Bank to compete effectively in the labour market and to recruit and retain high calibre staff; iv. Achieves fairness and equity in remuneration and reward. The Bank’s remuneration is made up of two main components namely “fixed pay” and “variable pay”:- i. Fixed pay consists of base salary and fixed allowances that are pegged to the market value of the job. ii. Variable pay rewards employees based on the performance of the Division, Department and Bank; and the employee’s individual performance. The Bank implemented the Deferred Discretionary Performance Bonus for the PGCEO and Senior Management. The objective of the deferred bonus is to align short-term compensation payment with the time-based risk, and to encourage employees to deliver sustainable long-term performance. PRINCIPLE B EFFECTIVE AUDIT AND RISK MANAGEMENT 1. Group Board Audit Committee (“GBAC”) The GBAC established by the Board comprises six (6) Independent Non-Executive Directors. The GBAC members have the relevant accounting or related financial management experience or expertise. The Chairman of GBAC, Mr Gregory Jerome Gerald Fernandes has vast experience in accounting. The roles and responsibilities of the GBAC are set out under the Board Audit Committee Report on pages 208 to 220. With the wide range of skills, knowledge and experience, the GBAC members are able to understand, analyse and challenge the financial reporting process and discharge their duties effectively. The members had attended relevant professional trainings during the year and will continue to keep themselves abreast of the relevant developments in accounting and auditing standards, practices and regulatory requirements. 2 Group Board Risk Management Committee (“GBRMC”) The GBRMC is responsible for overseeing risk management activities in managing credit, market, liquidity, operational, legal, reputational and other material risks as well as ensuring that the risk management process and framework are in place and functioning effectively. GBRMC is responsible for setting the overall tone of the Group and the Bank’s strategy in ensuring effective communication and integration of risk appetite and compliance within the business strategy, operations and culture. The Committee supports the Board in oversight responsibilities on internal controls, and risk management and strategies, policies, processes, frameworks and other risk related matters. It has the responsibility of reviewing and/or approving risk management and policies, guidelines and reports. 3. Independence of External Auditors The Bank’s External Auditors play an essential role to the shareholders by enhancing the reliability of the Group’s financial statements and giving assurance of that reliability to users of these financial statements. The GBAC manages the relationship with the External Auditors on behalf of the Board. The GBAC reviews and considers the re-appointment, remuneration and terms of engagement of the External Auditors annually. 196 CORPORATE GOVERNANCE OVERVIEW STATEMENT ORGANISATION EXECUTIVE SUMMARY CORPORATE GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION