Last updated : 08 Aug 2019    

Governance

We believe a sound corporate governance framework supported by strong leadership and good management practices contribute to enhanced accountability and transparency. We will continue to focus efforts in raising awareness and the adoption of good corporate governance.

As Malaysia's largest savings institution with assets totalled RM791.48 billion, we strive to be at the forefront in championing sustainable investments by incorporating Environmental, Social and Governance (ESG) principles in our investment considerations. Doing so enhances the social protection of our members so that they and future generations of EPF Members, have a sustainable retirement future.

Board and Investment Panel

Board and Investment Panel

Minister of Finance (Government)

Minister of Finance (Government)
Minister of Finance (Goverment)
 
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  • Roles and Responsibilities

    The Board assumes a number of specific responsibilities.

    • Oversee Implementation Of Policies Related To EPF Operations
    • Identify Key Risk Areas And Managing Them
    • Review Adequacy And Integrity Of Internal Control Systems

    The EPF Act 1991 provides for the establishment of our Investment Panel to impart strategic directions on investment-related issues. The Investment Panel determines and approves investment activities which includes:

    • Existing Guidelines
    • Policies On Risk Control
    • Asset Allocation
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  • Board Committees

    The Board and Investment Panel have established various committees to oversee specific matters pertaining to organisational operations.

    Board Audit Committee

    • Assists the Board in evaluating the effectiveness of internal controls, risk management (except in making investment decisions) and governance processes.
    • Oversees the financial reporting process and reporting quality of the annual and interim financial statements.
    • Reviews the appropriateness of the EPF’s accounting policies and changes thereto.
    • Maintains a formal and professional relationship with the external auditors and convened two meetings with external auditors in 2017 without the presence of the management.

      Terms of Reference
       

    Board Risk Management Committee

    • Assists the Board to oversee all operational risk management activities (except for making investment decisions).

    Investment Panel Risk Committee

    • Oversees investment risk, which includes recommending the aggregate risk appetite for the Investment Panel to sign off, approving risk management policies and limits, reviewing risk exposure and providing direction in relation to risk management practices within the investment functions.

    Finance and Development Committee

    • Approves additional budget of not more than five per cent from the total annual budget approved by the Board.
    • Assists the Board in approving matters relating to financial impact such as write-offs of loss other than in relation with investments.

    Strategic Committee

    • Reviews in detail proposed amendments and policy changes related to the EPF Schemes.
    • Endorses any recommendations and policy changes to the Board for approval.

    Personnel, Appointment and Services Committee

    • Assists the Board to consider and approve matters relating to employment, which includes employment terms and conditions.

    Board Disciplinary Committee

    • Responsible for any disciplinary proceedings and imposes penalties on employees as provided for under the EPF Rules and Regulations (Conduct and Discipline) 1993.

    Board Disciplinary Appeal Committee

    • Considers any appeal by employees against the decisions made by the Disciplinary Committee.

    Procurement Board Committee

    • Responsible for matters relating to the procurement of works, services and supply of goods.
  • Management Committees

    Management committees are established to oversee specific matters and ensure all compliance to governance standards. These committees report directly to the CEO or relevant key senior management members.

    Management Investment Committee

    • Recommends investment activities to the Investment Panel in line with the EPF’s guidelines, policies on risk control and asset allocation.
    • Consists of 13 members, including the CEO (or Deputy CEO (Investment) in the absence of the CEO) as Chairman.

    Management Procurement Committee

    • Responsible for matters relating to procurement of works, services and supply of goods.
    • Consists of key senior management, including the CEO as Chairman.

Shariah Governance

Apart from adopting good corporate governance practices, the EPF has also established a Shariah governance framework to ensure that the operations and investments of Simpanan Shariah comply with the Shariah principles

 

Shariah Governance Structure

 

Shariah Governance Structure

 

Board

  • Establishes the SAC as the authority on shariah matters, for the purposes of advising the Board and Investment Panel in ensuring that the management of Simpanan Shariah complies with the shariah principles.
  • Refers to the SAC on any matters relating to shariah and that which requires the ascertainment of shariah principles. The advice given by the SAC shall be binding on the Board.
  • Establishes a shariah compliance framework.

Investment Panel

  • Refers to the SAC on any investment matters relating to shariah and that which requires the ascertainment of shariah principles. The advice given by the SAC shall be binding on the Investment Panel.

Shariah Advisory Committee

  • Ascertains the application of shariah principles on any matters relating to Simpanan Shariah.
  • Advises the Board and Investment Panel on any shariah-related matters and the application of shariah principles related to Simpanan Shariah.
  • Verifies and approves any shariah compliance report in relation to the management of Simpanan Shariah for the EPF Annual Report.

Management

  • Ensures that the operations and investments of Simpanan Shariah adhere strictly to the shariah principles by referring to the SAC for advice on all shariah-related matters and implementing all SAC rulings.

Shariah Compliance Framework

There are four functions established by the Board under the framework:

  • Shariah Research and Advisory: Responsible for conducting Shariah research and providing shariah advice.
  • Shariah Monitoring and Review: Responsible for shariah compliance monitoring and review for the purpose of continuous assessment on the degree of shariah compliance.
  • Shariah Risk Management: Responsible for the management of shariah non-compliance risk for the purpose of mitigating any possible shariah non-compliance.
  • Shariah Audit: Responsible for Shariah auditing for the purpose of independent periodical assessment and objective assurance on the degree of Shariah compliance.

Communication with Stakeholders

At the EPF, we value our transparency, aligned with our corporate governance framework. Through our quarterly reports, we disclose investment activities comprising information which includes allocation, revenue from each asset class, total fund size and the outlook for the following quarter. We also disclose our top 30 equity investments quarterly to provide information on our holdings in Malaysia's public listed companies.

In line with advancements in information technology, we have developed and enhanced our website to facilitate easy and interactive access to information regarding members' account. Through i-Akaun (Member), members can access their EPF statements, check withdrawal application status and update their profile. Whereas employers can utilise the i-Akaun (Employer) to register employees, submit online contributions and check on contribution details.

We hold dialogues as well as attend and vote in annual general meetings (AGM) and extraordinary general meetings (EGM) of our investee companies. We have appointed nominees on the boards of listed and unlisted companies, to ensure that the EPF's interests are taken into consideration.

Internal Control and Risk Assessment

Our Board and management are fully committed to a robust internal control system, procedures and policies to ensure stakeholders’ interests and the EPF’s assets are fully protected.

Control Environment

A controlled environment and positive work culture sets the tone of our organisation. It sets the foundation for all other components of internal control, providing discipline and structure.

Relevant key activities include

  • Terms of reference
  • Organisational structure
  • Human resources policies and procedures
  • Culture of integrity

Risk Assessment

Our risk assessment involves a dynamic and ongoing process of identifying and assessing risks that may hinder the achievement of our objectives.

Relevant key activities include

  • Corporate Risk Scorecard (CRS)
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