​RISK MANAGEMENT GOVERNANCE STRUCTURE

KWAP’s ERM Oversight Structure

 

The Board is ultimately responsible for the oversight and management of KWAP's risks. The Board, through the Risk Management Committee (RMC) maintains overall responsibility for risk oversight in KWAP.

The RMC responsibilities include among others reviewing and ensuring adequacy of risk management policies and procedures, reviewing risk exposures, and ensuring that infrastructure, resources and systems are put in place for risk management activities.

The Board is also supported by the Audit Committee whose responsibility is to provide an independent assessment of the adequacy and reliability of the risk management processes and system of internal controls, and compliance with risk policies and regulatory requirements.

Enterprise Risk Management Committee (ERMC) which is chaired by the CEO serves as a platform where all risk related matters, be it operational or investment related are deliberated and addressed. Issues are then updated to Board's RMC for notification and decision, if necessary.

The dedicated independent risk management and functions, namely the Risk Management and Compliance Department (RMCD) and Internal Audit Department are responsible for ensuring the approved risk management framework and policies are implemented and complied with. They are also responsible for facilitating the risk management processes with operational units which include risk identification, assessment, mitigation and monitoring.

At the forefront, all units are responsible for identifying and managing risks within their operations. They are to ensure all daily activities are carried out within the established framework and full compliance with approved policies, procedures and limits.


RISK MANAGEMENT FRAMEWORK & POLICY

KWAP has a formalized Enterprise Risk Management Framework (ERMF) which is in turn supported by an ERM Policy, to facilitate the implementation of ERM. The ERM approach is benchmarked against and aligned to the ISO 31000:2009 Risk Management Standard. Below is the structure of key areas under KWAP ERM Framework:

 

Key areas and sub-framework include; Operational Risk Management Framework, Market Risk Management Framework and Credit Risk Management Framework. These frameworks are developed on modular basis to provide for a fair degree of segregation, depth and clarity for each key risks. KWAP has the flexibility to develop new sub-framework to address other risks if necessary. Other risks outside the broad risk categories (if any) are addressed with the corporate risk profile.  Management of such risk is often executed via risk mitigation programmes which are then duly executed in KWAP.

The latest addition to the ERM Framework is Liquidity Risk Management Framework. This was developed on a forward looking basis to handle a risk that will increasingly become more important in the future.