An outline of the core principles and strategies required to
restore the credibility of the global finance industry
Since 2008, the global financial industry has lurched from
crisis to crisis, calamity to calamity, resulting in an epic loss
of public trust in banking and financial institutions.
Rebuilding Trust in Banks argues that this series of
disasters have usually been the result failures of leadership and
governance, combined with unenforced systems of checks and
balances. Often, leaders lose their way, believing their own hype
and buying into their own propaganda. The more successful these
leaders are initially the greater their self-confidence grows along
with the certainty that they’re right. The result is a
dangerous hubris with no countervailing power to stop or change
reckless, unethical, or self-interested strategies. This book
offers a solution, with useful benchmarks for corporate governance
and a global perspective.
* Features effective best practices for ensuring good corporate
governance and responsible leadership in banking and finance
* Written by a renowned expert in corporate governance with more
than 40 years of experience, particularly in Asia
* Intended for corporate leaders and board members in financial
companies, as well as regulators, advisors, and students
If banks and other financial institutions truly want to rebuild
the trust they once enjoyed, this practical and prescriptive guide
offers effective best practices that can–and should–be
widely implemented throughout the industry.
Cuprins
Preface xi
Acknowledgments xix
Chapter 1 Leadership: A Force for Change 1
Napoleon–Leadership Lessons 13
Conclusion 17
Notes 17
Chapter 2 Leadership: From Success to Failure 25
Stan O’Neal 28
Jimmy Cayne 30
Dick Fuld 33
Fred Goodwin 37
Conclusion 42
Notes 43
Chapter 3 Setting the ‘Tone at the Top’
47
Conclusion 60
Appendix 3A Board Questions Regarding the ‘Tone at the
Top’ 63
Notes 68
Chapter 4 Ethics in Finance 71
Systemic Integrity 72
Market Integrity 75
Regulatory Integrity 78
Organizational Integrity 81
Personal Integrity 81
Four Ethical Lenses 90
Conclusion 93
Notes 94
Chapter 5 The Role of the Board: Theory and Reality
97
Blurring of the Boundaries 99
Role of the Chair 113
Role of the CEO 116
Role of Committees 117
Why Boards Failed 117
Conclusion 121
Appendix 5A The Role of Board Committees 123
Notes 126
Chapter 6 Leadership, Governance, Strategy, and Risk
131
Choice of Strategy 133
Avoiding Cultural Risk 144
Failure of Effective Implementation 146
Questions Regarding Risk 148
Conclusion 154
Appendix 6A Board Questions Regarding Strategy 156
Appendix 6B Board Questions Regarding Risk 165
Notes 170
Chapter 7 Developing Suitable Leaders 175
Succession Planning 175
Talent Management 186
The Impact of Remuneration and Reward on the Suitability of
Leaders 193
Conclusion 194
Appendix 7A Board Questions to Ensure Suitable People 197
Notes 203
Chapter 8 Ensuring Organizational Integrity 205
Creating a Compatible Culture 205
Problems of Compliance 209
Instituting Appropriate Controls 215
Conclusion 223
Appendix 8A Creating a Suitable ERM Framework 226
Notes 241
Chapter 9 Governance: The Wise Restraints That Set Men Free
245
Why Corporate Governance Matters 245
Three Components of Good Governance 251
Overlaps, Underlaps, and Turf Wars 260
Regulatory Arbitrage Based on Different Philosophies of
Regulation 261
Inadequate Sanctions and Penalties 262
The Way Forward 263
Conclusion 264
Notes 265
Chapter 10 Leadership with Governance: Rebuilding Trust in
Banks 271
Leadership Alone Is Not Enough 271
Governance Failed 272
What Is Needed to Rebuild Trust 276
Conclusion 286
Notes 290
About the Author 295
Index 297
Despre autor
JOHN ZINKIN is Managing Director of Zinkin Ettinger Sdn
Bhd and a faculty member of the Iclif Leadership and Governance
Centre, Malaysia, specializing in training boards in ethics and
governance. John previously served as managing director of
corporate governance at the Iclif Leadership and Governance Centre,
Malaysia. Prior to that, he was CEO of the Securities Industry
Development Corporation (SIDC)–the training and development
arm of the Malaysian Securities Commission, where he was
responsible for taking the company from its incorporation to
financial self-sufficiency. John has more than forty years’
experience in business, twenty-eight of which have been in Asia,
where he held senior line management and corporate
strategy/business development positions in major multinational
manufacturing, marketing, and consulting companies.
In 2013, John was awarded the Panglima Makhota Wilayah (PMW) by
the federal government of Malaysia, which carries the title of
Datuk for services to the nation. John attended the London Business
School where he received an MSc in Business Administration, and
Oxford where he received a BA in Politics, Philosophy and
Economics.
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