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ANNUAL REPORT 2021 59

Board Risk Committee (BRC)

The BRC’s main function is to support the Board in managing risks according to BNM’s Policy Document on Risk Governance and
to oversee Management’s activities in managing risks with respect to credit, market and liquidity risk and to ensure that the risk
management process is in place and functioning.

The BRC comprises three (3) members (including the BRC Chairman) majority of whom are INEDs and chaired by an INED.

The BRC has oversight and is responsible for the following:

1 Strategy and Policy
• Oversee, review and approve/recommend risk management philosophy and strategy, including risk appetite to the Board
for approval.
• Review and approve/recommend the risk management framework, policies, controls and systems of the Bank in accordance
with the Board approved risk management philosophy and strategy.
• Review and approve/recommend to the Board the risk appetite/tolerance of the Bank at enterprise and strategic business
unit levels to the Board for approval.
• Recommend new products/services, systems and processes which are fundamentally different from the Bank’s existing
products/services, systems and processes as proposed by Management, to the Board for approval.
• Review, approve/recommend new sourcing providers and arrangements for the Board’s approval and periodically be
informed and review on the performance of the existing outsourcing providers prior to renewal.
• Maintain continued awareness of any changes in the Bank’s risk profile to ensure that the Bank’s business activities are in
line with the overall risk strategy, appetite and tolerance.

2 Organisation
• Overseeing the overall management of all risks including market risk management, asset and liability management, credit
risk management, country risk management and operational risk management.
• Ensure clear and independent reporting lines and responsibilities for the overall business activities and risk management
functions.
• Cultivate a proactive risk management culture and compliance management culture in the day-to-day business and activities.
• Independent review/oversight of the Bank’s risk management, policies, procedures, infrastructure, capabilities,
environment and processes.

3 Measurement
• Approve/recommend risk methodologies including measurement and management of risks arising from the Bank’s
business and operational activities including approve/recommend to the Board any changes to the risk limit for the
Board’s approval.
• Ensure the appropriateness of the risk measurement methodologies (including assumptions made within the methodologies)
under the prevailing business environment.
• Engage external and independent reviewer(s) for the validation of risk measurement methodologies and outputs as required.
• Review and approve/recommend broad-based risk limits to the Board’s for approval and to ensure the risk limits are within
the Board’s approved risk appetite and strategy.
• Approve/recommend detailed risk limits based on the Board’s broad based limits/tolerance/appetite.
• Oversee the management’s actions to ensure consistency with the Board’s approved risk appetite, risk strategy,
risk policies and that risk limits granted are adhered to and within the approved risk limits.