Page 118 - KWAP_AR2022

116 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) FoR BEttER GovERNANcE

RISK MANAGEMENT
AND COMPLIANCE

Enhanced Risk Analytics

• Established structured and well-defined stress-testing framework to carry out forward-looking scenario analysis.
KWAP’s stress-testing process include generating scenarios, translating them into risk parameters through
macroeconomic quantification, assessing the impact of these scenarios on the market and on KWAP’s profit and
loss. All of this informs an action plan to mitigate risks and swiftly capture opportunities.
• In 2022, we conducted several stress-test exercises covering a broad range of emerging risks.

TERAS 5 Initiative: The Refinement of KWAP’s Corporate Governance Framework

• In addition to Retirement Fund Act 2007 and Board and Investment Panel Charter, KWAP has developed guidelines
and implemented several initiatives related to Corporate Governance.
• The new Corporate Governance Framework, which was approved by the Board in 2022, is expected to enhance
the corporate governance in KWAP by streamlining and reinforcing the various governance elements.

• The objective of the Corporate Governance Framework is to provide an overview of the corporate governance
structures, principles, and practices with respect to the business activities undertaken by KWAP.
• The Framework also aims to promote a more transparent, cohesive, and efficient approach to corporate
governance as well as to provide clear guidance on how authority is exercised within KWAP.

TERAS 5 Initiative: The Realignment of Management Committees and Working Groups in KWAP

• There have been tremendous achievements by KWAP over the years. However, organic growth requires KWAP to
reimagine an effective and robust committee structure that can cater for the next phases in our growth trajectory.
• Hence, KWAP has conducted a thorough assessment of its existing structure of Management Committees and
Working Groups to ascertain their alignment and efficacy in bolstering the organisation’s governance, management
and operational efficiency. The reorganisation rationalised the committee structure and reduced the number of
committees by 33 percent. This was achieved by collapsing committees with overlapping responsibilities, retiring
committees with redundant responsibilities, while ensuring proper oversight of committee deliberations. All the
while, right-sizing committee sizes and membership to ensure the right skill sets are in place to maximise the
efficiency and effectiveness of the committees.
• The revised structure for the Management Committees and Working Groups, which was approved by the Board
in 2022, is to fortify decision-making effectiveness at the management levels and enhance operational efficiency
throughout the organisation.

Site Visits to KWAP Properties/Associate Companies/Potential Investment

• KWAP conducted site visits to properties and fund managers offices to ensure an independent risk assessment
and risk oversight of the properties and private equity firms’ investments are conducted.

• In 2022, KWAP visited four Private Equity (PE) Fund Managers and four properties in which we have vested
interest to discuss potential risk matters with the Asset Manager, investment advisors and our Fund Managers on
the management of the investment, risk and compliance matters as well as to ensure relevant risks identification,
controls and mitigations are in place.

The pace of site visits has been curtailed due to travel restrictions.