cg for sustainable banking
DESCRIPTION
corporate governanceTRANSCRIPT
![Page 1: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/1.jpg)
Corporate Governance
for Sustainable Banking :
Conceptual Framework ASHRAF AL
MAMUNAssociate Professor, BIBM
![Page 2: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/2.jpg)
![Page 3: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/3.jpg)
Systems
thinking
CORE SUSTAINABILITY CONCEPTSIntergenerational responsibility
Socio-economic justice
![Page 4: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/4.jpg)
CORPORATE SUSTAINABILITYTRIPLE BOTTOM LINE
Econ
omy
Environment
Equit
y
Profi
ts /
Planet /
People /
![Page 5: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/5.jpg)
CORPORATE SUSTAINABILITYESG
Gov
erna
nce
Environmental
Social
![Page 6: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/6.jpg)
CORPORATE SUSTAINABILITY
GREEN +CSR
Econ
omic
Environmental
Social
![Page 7: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/7.jpg)
1. Pre-Compliance
2. Compliance
4. INTEGRATED STRATEGY
5. PURPOSE & PASSION
SUSTAINABILITY JOURNEY
3. Beyond Compliance
![Page 8: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/8.jpg)
… embedded in supply chains
… acted upon by boards
Sustainability should be … fully embedded in strategies and operations
50%
69%
72%
88%
93%
96%
2010 2007
UN Global Compact and Accenture study, survey of 766 worldwide CEOs, June 2010
CEO MINDSET IS SHIFTING
![Page 9: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/9.jpg)
Regulators
Commmunities
Governments
Employees
Consumers
25%
28%
32%
39%
50%
26%
29%
39%
45%
58%
2010 2007
STAKEHOLDERS INFLUENCE CEOs
UN Global Compact and Accenture study, survey of 766 worldwide CEOs, June 2010
![Page 10: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/10.jpg)
CEOs’ SUSTAINABILITY DRIVERS
UN Global Compact and Accenture study, survey of 766 worldwide CEOs, June 2010
![Page 11: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/11.jpg)
“The possibility that
sustainable enterprises will flourish
forever.”
IN SUMMARY …
SUSTAINABILITY IS SMART BUSINESS
![Page 12: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/12.jpg)
12
Strategy Implementation
CorporateGovernance
Strategy Formulation
StrategicCompetitivenessAbove-Average
Returns
Strategic IntentStrategic Mission
The ExternalEnvironment
The InternalEnvironment
The Strategic Management Process and CG
Feedback
Stra
tegi
c In
puts
Stra
tegi
c Act
ions
Stra
tegi
c O
utco
mes
CooperativeStrategy
Competitive Rivalryand Competitive
Dynamics
InternationalStrategy
Business-LevelStrategy
Acquisition andRestructuring
Strategies
OrganizationalStructure,
Controls and Culture
StrategicLeadership
![Page 13: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/13.jpg)
Corporate Governance (CG)Corporate governance is
a relationship among stakeholders that is used to determine and control the strategic direction and performance of organizations
concerned with identifying ways to ensure that strategic decisions are made effectively
used in corporations to establish order between the firm’s owners and its top-level managers
![Page 14: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/14.jpg)
• Risk bearing specialist (principal) pays compensation to
• A managerial decision-making specialist (agent)
Agency Relationship: Owners and Managers
An AgencyRelationships
Managers(Agents)
Shareholders(Principals)
• Decision makers
• Owners
![Page 15: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/15.jpg)
15
Keys to Corporate Governance
Transparency
Accountability
Information Disclosure
Ethics
![Page 16: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/16.jpg)
Governance Mechanisms
OwnershipConcentration
Boards ofDirectors
ExecutiveCompensation
Market forCorporate Control
![Page 17: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/17.jpg)
BIS CG Principles for Banks
Board members should be qualified for their positions, have a clear understanding of their role in corporate governance and be able to exercise sound judgment about the affairs of the bank.
The board of directors should approve and oversee the bank’s strategic objectives and corporate values and ensure that they are communicated throughout the banking organization.
The board of directors should set and enforce clear lines of responsibility and accountability throughout the organization.
![Page 18: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/18.jpg)
BIS CG Principles for Banks
18
The board and senior management should effectively utilize the work conducted by the internal audit function, external auditors, and internal control functions.
The board should ensure that compensation policies and practices are consistent with the bank’s corporate culture, long-term objectivesand strategy, and control environment.
The bank should be governed in a transparent manner. The board and senior management should understand the bank’s operational structure, including where the bank operates in jurisdictions or through structures that impede transparency.
![Page 19: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/19.jpg)
19
Bangladesh Bank Guidelines for CG in Bank Management1. Responsibilities and authorities of
the board of directors: (a) Work-planning and strategic management(b) Lending and risk management(c) Internal control management(d) Human resources management and development(e) Financial management(f) Formation of supporting committees(g) Appointment of CEO
![Page 20: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/20.jpg)
20
Bangladesh Bank Guidelines for CG in Bank Management (Cont..)
2. Responsibilities of the chairman of the board of directors
3. Responsibilities of the adviser4. Responsibilities and authorities of the
CEO 5. Meeting of Board of Directors etc.6. Number of members in Executive
Committee 7. Training for Directors
![Page 21: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/21.jpg)
21
Bangladesh Bank Guidelines for CG in Bank Management (Cont..)CONSTITUTION OF THE AUDIT COMMITTEE
OF BOARD OF DIRECTORS The audit committee will comprise of 05
(five) members Members of the committee will be nominated
by the board of directors from the directors Members may be appointed for a 03 (three)-
year term of office Company secretary of the bank will be the
secretary of the audit committee
![Page 22: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/22.jpg)
22
It is important to serve the interests of the Bank’s multiple stakeholder groups!
Corporate Governance and Ethical Behavior
Although the idea is subject to debate, some believe that ethically responsible companies design and use governance mechanisms that serve all stakeholders’ interests
Importance of maintaining ethical behavior through governance mechanisms is seen in the example of Enron and Arthur Andersen.
Financial Product Market
Stakeholders
OrganizationalStakeholders
Capital MarketStakeholders
![Page 23: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/23.jpg)
![Page 24: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/24.jpg)
![Page 25: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/25.jpg)
![Page 26: CG for Sustainable Banking](https://reader034.vdocuments.us/reader034/viewer/2022052702/5695cff21a28ab9b02903acf/html5/thumbnails/26.jpg)
Many Thanks….