Committees Manual

This guideline is a work guideline for the Remuneration and Nomination Committee in carrying out its duties and responsibilities, which is part of the creation of a Good Corporate Governance system. 

Company Risk Management

Company Risk Management is a process in planning, managing, controlling and monitoring the activities of the Company to reduce risks that can have an impact on the condition of the Company's capital management and income. Risk Management in the Company covers credit, financial (liquidity and funding), operational, legal and regulatory, strategic/business risks, and other risks faced by the Company in daily activities.

BFI Finance applies a holistic risk management approach to manage the risks faced and their potential impacts on financial performance. Control over risks is carried out by identifying and evaluating the main risks faced by the Company, developing mitigation strategies and controls to manage risks, and measuring the level of risk after risk control is carried out.

By implementing a comprehensive risk management system, it allows the Company to effectively manage risk exposure so that it can estimate risk portfolios and take preventive actions and maximize the achievement of profits.

Risk Management System

With increasing business competition, good, measured and documented risk management practices are the main pillars in every decision making process. The company operates in a very dynamic environment characterized by intense competition, a growing customer demographic, changing legal conditions and an ever-challenging macroeconomic climate. Senior management is responsible for effectively controlling the risks faced by the Company to estimate potential risks and implement preventive actions. This provides certainty for stable and healthy profit growth.

The Company's Framework Guidelines in risk management systems are based on the Three Lines of Defense approach, which consists of oversight, control and management functions.

1. First Line of Defense
   Business, Operational and Transformation units are responsible for setting up its own internal control mechanism, identifying, assessing, overseeing, and mitigating risks. Their main responsibility is to manage risk exposure daily in accordance with established market targets, policies, and procedures.
2. Second Line of Defense
   The Asset Management & Inventory Department, under the Business & Asset Management Directorate, conducts independent oversight, reviews and approves strategies and acceptable risk levels, and collaborates with business and operational units to ensure risks are managed within the established limits. The Financial Control Department, under the Finance Directorate, manages and establishes the overall budget along with acceptable risk levels, monitors their compliance, and oversees short-term and long-term funding sources as well as liquidity positions based on the quality of the portfolio’s developments. The Legal & Litigation Unit, under the supervision of the Asset Management & Inventory Department, manages compliance risks related to legal matters and is responsible for ensuring that all applicable regulations are communicated and adhered to by the relevant units.
3. Third Line of Defense
   The Internal Audit Department periodically conducts independent audit and assessment on each process undertaken by each unit on the first and second lines of defense.