OTHER RISKS AR Mandiri 2013 English

Annual Report 2013 PT Bank Mandiri Persero Tbk.

6. OTHER RISKS

Aside from primary risks, the Bank also appreciates the existence of other risks, such as compliance, legal, reputational, strategic, information technology, competitive, human resources and business interruption risks. Every year, the Bank carries out a top-down assessment and measurement of all risks, including other primary risks, by management through an Enterprise Risk Assessment voting system. Risk proiles are also assessed through a bottom-up process every quarter. The management of other risks is conducted through the Operational Risk Committee and directly implemented by supporting line units, such as the Compliance Unit, Legal Unit, Corporate Secretary Unit and IT Operations Unit. As regards legal risk, the Bank continues to tighten its control of legal risk by, among other things, the placement of Legal Oicers in line units at Head Oice and in Regional Oices, which oicers are obliged to ensure that all activitiestransactions have been reviewed from the legal perspective. In the strategic risk arena, the Bank carries out performance reviews and evaluations of business target development policies, and makes improvements to the strategy plan and business targets by considering both internal and external conditions, whenever required. The Bank continues to enhance the implementation of the inancial performance management support program through the development of automated budgeting, PMS enhancement, and the Executive Information System EIS. On compliance risk, the Bank has adopted a Code of Conduct as a part of the Bank Mandiri corporate culture. At the strategic planning stage, the Bank constantly assesses the level of compliance adequacy with the prevailing laws and regulations. The Bank also applies a consistent and comprehensive rotation and transfer system to employees and oicers in strategic positions. As regards reputational risk, the Bank has adopted customer service standards that are monitored on a regular basis and are incorporated in the KPIs of branches. The Bank has established a Contact Center so that customers may submit complaints and inquiries on Bank Mandiri products and services. The Bank also has an extensive Corporate Social Responsibility program that provides assistance in the education, healthcare, culture, sports, environmental, religious and disaster relief ields.

7. MODEL VALIDATION