37 MANAGING OUR KEY ESG RISKS GOOD GOVERNANCE SUSTAINABLE ECONOMIC GROWTH ENVIRONMENTAL STEWARDSHIP EMPOWERING PEOPLE AND COMMUNITIES APPENDIX GOOD GOVERNANCE Sustainability-linked Remuneration Incorporating sustainability or ESG metrics into executive remuneration has become increasingly important as mechanism to demonstrate organisational accountability. At Kenanga, we integrated ESG Key Performance Indicators (“KPIs”) with assigned weightage in the Group's Balanced Scorecard for FY2023, aligning with the Group's Sustainability Roadmap 2023-2025. These ESG KPIs were integrated into the Balance Scorecards of the Group Managing Director, relevant Senior Management Team members, and were cascaded across the Group, with the annual performance incentive linked to their respective Balance Scorecards. We will continue to explore different approaches in linking Sustainability KPIs to executive remuneration while enhancing our ESG KPIs monitoring mechanism to ensure meaningful integration of ESG considerations into relevant roles, as we further strengthen our sustainability governance. BUILDING AN ETHICAL CULTURE REGULATORY COMPLIANCE WHY IT MATTERS One of our key priorities in adopting good governance practices includes fostering a compliance culture that empowers our employees to uphold high standards of integrity and vigilance in carrying out their responsibilities at work. We are committed to ensuring that our employees are well equipped to meet the challenges of their respective roles and demonstrate behaviours that align with the Group’s values. Our Group Regulatory and Corporate Services division has established a strong governance foundation, including corporate policies, procedures and control measures, to help the Group manage risks and respond to any incidents of non-compliance or unethical behaviour. A key component of our strategy to build an ethical culture includes designing training programmes and awareness initiatives which embed our principles of ethics and integrity so that employees are reinforced, understood and practised throughout every level of our workforce. Some of the key measures we have implemented include: Regulatory issuances and updates are communicated to employees as and when they are updated by the regulators i.e. Regulatory Brew, introduced in 2023, is a weekly newsletter aimed at educating all employees about the latest governance trends locally and regionally through selected news articles. The newsletter also serves as a resource for employees to stay updated on regulatory changes by providing a compilation of recent rules and guidelines. An Annual Regulatory Seminar (“ARS”) was organised through which we reinforced our standards of conduct on matters such as conflicts of interest, governance, fraud, bribery and corruption, Anti-Money Laundering, Countering Financing of Terrorism and Targeted Financial Sanctions (“AML/ CFT/ TFS”), whistleblowing, as well as updates on the latest regulatory requirements. Key ethics and regulatory compliance policies have been made available online to all employees via the Policy & Procedure Governance System, an internal repository platform containing our policies and procedures. An ARS assessment was conducted to gauge awareness and understanding of our employees, reinforcing their grasp and knowledge on good governance and business practices. The Enterprise Wide Risk Assessment was conducted to identify and categorise AML/ CFT/ TFS risks across various dimensions to ensure a more thorough approach to risk management. The result of this assessment enables Kenanga to prioritise risks and allocate resources effectively in the development and implementation of strategies to mitigate or manage the identified risk effectively, reducing the likelihood of financial losses and reputational damage associated with financial crime controversies. New hires are required to attend an onboarding training session to familiarise themselves with the relevant frameworks, procedures and policies, while annual training is provided as a refresher for existing employees. The sessions are delivered through a blended format, which includes reading materials and explainer videos on topics such as Anti-Bribery and Corruption, AML/ CFT/ TFS, Chinese Wall Policy, Compliance and Anti-Fraud practices.
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