Santiago Principles Self-Assessment

Khazanah Nasional Berhad

Fund Details Fund Website Search Assessments PDF version
  • Pillar 1: Legal
  • Pillar 2: Institutional
  • Pillar 3: Investment
Principle 1

1. The legal framework for the SWF should be sound and support its effective operation and the achievement of its stated objective(s).

1.1. The legal framework for the SWF should ensure legal soundness of the SWF and its transactions.

1.2. The key features of the SWF’s legal basis and structure, as well as the legal relationship between the SWF and other state bodies, should be publicly disclosed.

Khazanah Nasional Berhad (“Khazanah”) was incorporated under the Malaysian Companies Act 1965 (now Companies Act 2016) on 3 September 1993 as a public limited company. Except for one share owned by the Federal Lands Commissioner (Incorporated), all the share capital of Khazanah is owned by the Minister of Finance Incorporated, a body incorporated pursuant to the Ministry of Finance (Incorporation) Act 1957. 

Khazanah is governed by the Malaysian Companies Act and other applicable laws, and various internal governance and accountability frameworks that establish a clear structure of responsibility, delegated authority and accountability. 

Khazanah’s legal relationship with the Government of Malaysia is disclosed on our website.

https://www.khazanah.com.my/About-Khazanah/Corporate-Profile 

Principle 6

6. The governance framework for the SWF should be sound and establish a clear and effective division of roles and responsibilities in order to facilitate accountability and operational independence in the management of the SWF to pursue its objectives.

The Board of Directors (Board) governs our operations and is ultimately accountable and responsible for Khazanah’s overall governance – this includes both performance and conformance matters.

A Board Charter sets out the roles and responsibilities of the Board in overseeing the management of Khazanah.

The Board is assisted by three subcommittees – the Executive Committee (EXCO), the Audit and Risk Committee (ARC) and the Nomination and Remuneration Committee (NRC).

In addition, a Management Committee (MC) and a newly formed Investments Committee (IC) were established in September 2018 to assist the Board in managing and overseeing operational and investment-related matters.

Our Framework of Integrity, Governance and Risk Management (FIGR) includes a Risk Management Policy, Schedule of Matters for the Board (SMB), Limits of Authority (LOA) for the Management, a Code of Conduct and the appropriate policies and procedures.

Principle 18

18. The SWF’s investment policy should be clear and consistent with its defined objectives, risk tolerance, and investment strategy, as set by the owner or the governing body(ies), and be based on sound portfolio management principles.

18.1. The investment policy should guide the SWF’s financial risk exposures and the possible use of leverage.

18.2. The investment policy should address the extent to which internal and/or external investment managers are used, the range of their activities and authority, and the process by which they are selected and their performance monitored.

18.3. A description of the investment policy of the SWF should be publicly disclosed.

The Investment Policy Statement (IPS) clearly outlines our Investment mandate, objectives and principles as well as our risk appetite. Our portfolio and funding strategies incorporate parameters and limits as stipulated by our Asset-Liability Management framework.

The large majority of our investments are conducted using in-house capabilities. Where we do engage external managers, we have a framework for the selection and monitoring processes which is currently under review to reflect the new mandate.

The IPS is in our annual report and available on our website: https://www.khazanah.com.my/Our-Investments/Overview