### UPHOLDING STRONG GOVERNANCE PRACTICES FOR SUSTAINABLE GROWTH
###### Sustainability Governance
**As a part of our comprehensive sustainability management approach, we have established a sustainability governance**
**structure since FY2021. This structure has facilitated the progressive achievement of our sustainability goals and ensured**
**the integration of sustainability considerations into our decision-making processes. This governance structure enables us to**
**effectively manage and mitigate sustainability and climate-related risks as well as prudently evaluate opportunities.**
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###### UPHOLDING STRONG GOVERNANCE PRACTICES FOR SUSTAINABLE GROWTH
###### Board-level Oversight
###### Alliance Bank Board of Directors
**The Board of Directors, as the Bank's highest governing body, sets the tone from the top, oversees and approves**
**sustainability strategies, priorities and targets through incorporating appropriate ESG considerations in the Bank's**
**business strategies. The Board discusses sustainability matters including climate-related topics at least twice a year.**
###### Group Sustainability Committee ("GSC")
###### Group Risk Management Committee ("GRMC")
**The GSC is the dedicated Board-level sustainability committee to support the**
**Board in the governance of sustainability of the Group, and ensure the Group's**
**strategies, goals and principles pertaining to sustainability are aligned with the**
**Group's sustainability commitment.**
**Consists of four Non-Executive Directors, three of whom are Independent**
**Directors, the GSC meets at least quarterly to deliberate and endorse/**
**approve sustainability-related matters and initiatives including progress**
**against our topline goals, sustainability capability building, and enhanced**
**sustainability disclosures.**
**The GRMC is a Board-level**
**risk committee that oversees**
**management of enterprise risks**
**which include sustainability. The**
**GRMC deliberates sustainability**
**and climate-related risks as**
**and when required and includes**
**considerations of the broader**
**sustainability strategy.**
###### Other Board Committees
**To ensure effective governance, specific sustainability aspects are embedded within the oversight of the following two**
**Board committees:**
**1. The Group Nomination & Remuneration Committee ("GNRC"), which oversees the design and operation of the**
**Group's remuneration systems, ensures the linkage of Senior Management remuneration to performance against**
**specific sustainability and climate-related targets; and**
**2. The Group Audit Committee ("GAC"), which provides independent oversight of the Group's financial reporting**
**and internal control system, ensures checks and balances within the Group, reviews audit reports which include**
**observations pertaining to the Bank's ESG practices.**
###### Management of Sustainability
###### Group Management Committee ("GMC")
###### Executive Risk Management Committee ("ERMC")
**At the management level, the Group Management**
**Committee ("GMC") deliberates and endorses the**
**Bank's sustainability strategy and initiatives before**
**escalation to the GSC as and when required.**
**The ERMC monitors material climate-related risks and**
**ensures such risks are considered within the Group's risk**
**management and control framework and across the**
**3 Lines of Defence to safeguard the Bank's resilience**
**against adverse impacts of climate change.**
###### Sustainability Steering Committee ("SSC")
**The SSC is responsible for steering, coordinating, and implementing the Bank's sustainability strategies, policies and**
**procedures. The SSC is also responsible for managing and monitoring the Bank's material sustainability matters**
**including climate-related matters.**
**The SSC recommends sustainability-related frameworks, policies, goals, metrics and initiatives to the GSC for review**
**and endorsement/approval.**
**The SSC is chaired by the Group Chief Executive Officer ("Group CEO") and comprises Senior Management with key**
**leads from the relevant divisions involved in the sustainability workstreams. It meets at least quarterly, or as and when**
**required, and provides regular reports on the Bank's sustainability initiatives to the GSC and Board.**
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###### UPHOLDING STRONG GOVERNANCE PRACTICES FOR SUSTAINABLE GROWTH
###### Sustainability Execution
###### Group Chief Executive Officer ("Group CEO")
###### Alliance Islamic Bank Chief Executive Officer ("AIS CEO")
**The Group CEO, supported by the AIS CEO and Head**
**of Sustainability provides oversight on the integration**
**of sustainability and climate-related matters across the**
**Bank's strategy, frameworks, policies, and processes.**
**As Alternate Chairman of the SSC, the AIS CEO**
**spearheads the coordination of the Bank's sustainability**
**strategies across the Bank's operations. The AIS CEO**
**also integrates Value-based Intermediation elements**
**from the Islamic Banking space into the Group's**
**sustainability strategy to create positive community and**
**environmental impact.**
###### Head of Sustainability
###### Sustainability Workstreams
**The Head of Sustainability drives the coordination,**
**implementation and execution of the sustainability**
**strategy framework through various sustainability**
**initiatives** **to** **achieve** **the** **Bank's** **topline** **goals.**
**Supported** **by** **the** **Group** **Sustainability** **Division,**
**sustainability** **initiatives** **are** **implemented** **in**
**collaboration with various divisions which have been**
**organised into five sustainability workstreams.**
**Five sustainability workstreams driven by business units**
**and relevant support functions (such as our Lines of**
**Business, Group Risk Management, Group Credit, Group**
**Finance, Group Human Resource, Group Strategy,**
**Business Development and Performance Management,**
**Group Corporate Services) are coordinated by the**
**Group Sustainability Division and collaborate to**
**implement initiatives that contribute to the Bank's**
**overall sustainability strategy and topline goals.**
**strategy framework through various sustainability** **Business, Group Risk Management, Group Credit, Group**
**initiatives** **to** **achieve** **the** **Bank's** **topline** **goals.** **Finance, Group Human Resource, Group Strategy,**
**Supported** **by** **the** **Group** **Sustainability** **Division,** **Business Development and Performance Management,**
**sustainability** **initiatives** **are** **implemented** **in** **Group Corporate Services) are coordinated by the**
**collaboration with various divisions which have been** **Group Sustainability Division and collaborate to**
**organised into five sustainability workstreams.** **implement initiatives that contribute to the Bank's**
**overall sustainability strategy and topline goals.**
**_Further details on Alliance Bank's governance structure, including credentials, experience and trainings programmes undertaken can be found in_**
**_the Corporate Governance section on pages 147 to 185, and on our Corporate Governance website (https://www.alliancebank.com.my/About-Us/_**
**_Governance-Investor-Relations/Corporate-Governance)._**
###### Integrating Climate-related Risks into the Three Lines of Defence
**The Bank has taken proactive measures to manage our exposures to climate-related risks across our business operations.**
**We have embedded these risks into our internal control frameworks across the three lines of defence to ensure the robust**
**management of material climate-related risks.**
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###### UPHOLDING STRONG GOVERNANCE PRACTICES FOR SUSTAINABLE GROWTH
###### Board of Directors
**Board-level Committees – GSC, GRMC**
**Management-level Committees – SSC, GMC, ERMC**
###### 1st Line of Defence 2nd Line of Defence 3rd Line of Defence
**•** **Lines of Business**
**•** **Support Units**
**•** **Group Risk Management**
**•** **Group Compliance**
**•** **Shariah Review**
**•** **Group Internal Audit**
**•** **Compliance with all regulations**
**and policies**
**•** **Develop relevant policies and**
**procedures**
**•** **Identify, assess, measure, report**
**and monitor risks**
**•** **Benchmark, develop and maintain**
**standards,** **policies** **and** **risk**
**management framework**
**•** **Review adequacy of controls and**
**mitigation**
**•** **Perform compliance reviews**
**•** **Provide independent review and**
**objective** **assurance** **to** **Senior**
**Management/Management/Board**
**Committees and Board**