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. Recognising that the system only provides reasonable rather than absolute assurance against the occurrence of any material misstatements, losses or fraud, appropriate controls and processes have been put in place to mitigate inherent limitations of the system such as human error and potential impact of external events beyond the Management’s control. In establishing a robust risk management and internal control governance framework, the Board constantly keeps abreast with the developments in risk and governance matters, which is essential in setting the tone and cultivating a culture of effective risk management. 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 control 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 control systems ensuring the adequacy of appropriate checks and balances within the Group. To keep the Board updated, the summary of Board Committee report is provided by the Chairman of the Board Committees highlighting key deliberations and decisions on delegated matters. The Board is of the view that the internal control framework that has been instituted throughout the Bank is sufficient to safeguard the shareholder’s investment, customers’ interest and Bank Islam’s assets. The governance structure established further ensures effective oversight of risks and internal controls across the Group at all levels. The Board remains responsible for the governance of risk and internal control as well as all actions of the Board Committees in executing their delegated oversight duties. 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 risk that may arise. The Group has established processes to ensure the adequacy and integrity of its internal control system and manages the existing and potential risks with control and governance processes. INTRODUCTION Pursuant to Paragraph 15.26(b) of the Bursa Malaysia’s Main Market Listing Requirements (MMLR), the Board of Directors of Bank Islam (Board) is pleased to provide the following disclosure on 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 2024. Bank Islam Malaysia Berhad ◆ Integrated Annual Report 2024 244 Statement on Risk Management and Internal Control
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