Baiterek's Risk Management System
The risk management system is an integral part of the Holding's activities, which is aimed at identifying, assessing and monitoring all significant risks of the Holding, as well as taking measures to reduce the risks level of these risks.
The risk management system of the Holding is presented as three-level hierarchy:
The first level
The Board of Directors bears full responsibility for the proper functioning of the risk management system, for management of key risks and corporate risk management system. The Board of Directors defines objectives of the Holding's activities and approves documents related to risk management.
An Audit Committee has been established under the Board of Directors to prepare recommendations for establishing an effective system for monitoring the financial and economic activities of the Holding (including completeness and reliability of financial reporting), monitoring the reliability and effectiveness of internal control and risk management systems, and for the execution of documents in the field of corporate management, for monitoring the independence of external and internal audit.
The Internal Audit Service conducts audits of risk management procedures and risk assessment methods and also develops proposals aimed at improving the effectiveness of risk management procedures, reports on the risk management system to the Board of Directors of the Holding.
The second level:
The Management Board bears responsibility for the creation of an effective risk management system and risk control framework to ensure compliance with corporate policy requirements. The Management Board is responsible for creating a culture of "risk awareness" that reflects the risk management and the philosophy of risk management of the Holding. The Management Board is also responsible for introduction of the effective risk management system in which all employees have a clearly defined responsibility for risk management and are responsible for the proper performance of their duties. The Management Board is authorized to exercise part of its functions in the field of risk management through the establishment of relevant committees.
The Asset and Liability Committee (ALC) was established under the Management Board, which is a permanent collegial body of the Holding and is accountable to the Management Board. The purpose of the Committee is to develop recommendations to improve assets and liabilities management of the Holding and SUBs in order to achieve principles of assets and liabilities diversification, optimizing risks (financial, operational, strategic, and legal) and ensuring financial stability of the Holding.
The third level:
The Risk Management Department carries out overall coordination in risk management and monitoring over compliance with the requirements of regulatory documents in the field of risk management, as well as monitoring of the implementation of common principles and methods for identifying, assessing, managing and reporting on financial and non-financial risks.
Structural units (risk owners) play a key role in the risk management process. Employees of the Holding on a daily basis deal with and manage risks as well as control the potential effect of risks on the scope of their activities. Structural units are responsible for the implementation of the risk management action plan, timely identification and reporting of major risks in their activities and development of risk management proposals that should be included in the work plan.
The Holding constantly works on improving the risk management system in accordance with the best international risk management practices. This work describes the development and updating process of the methodology for risk assessment and control, as well as reports on risks presented to the Management Board and the Board of Directors of the Holding.
The main objectives of the policy are:
- Building an effective comprehensive system and creating an integrated risk management process as an element of Holding and SUBs, as well as continuous improvement of activities based on a unified and standardised approach for risk management methods and procedures;
- Ensuring adoption of acceptable risks, corresponding to the scale of their activities by the Holding and the SUBs;
The policy is aimed at implementation of the following objectives:
- Creation of a sound basis for decision-making and planning;
- Ensuring continuous, coordinated risk management process based on timely identification, assessment, analysis, monitoring and control in order to ensure achievement of the goals;
- Introduction and improvement of the risk management system, which allows preventing and minimizing potentially negative developments;
- Increasing efficiency of use and allocation of resources;
- Prevention of diseconomies and losses by increasing the efficiency of the Holding's activities, ensuring the protection assets and equity capital of the Holding and SUBs;
- Ensuring the effectiveness of business processes, the reliability of internal and external reporting and assisting compliance with legal requirements.