Transcript Diapositiva 1 - Holy Spirit University of Kaslik

Corporate Governance and Ethics:
Governance, Ethics and Global Trends
USEK Monday April 14th, 2014
Chahdan Jebeyli
Group Head Legal & Compliance
Relation of Modern Corporate
Governance ( CG ) and Ethics:
An
Option
2
Or
A
Must?
Causes of 2007 Global Financial Crisis:
• Global Financial Crisis exposed significant shortcoming in the
Governance of Corporates and their culture and ethics.
• Cases of : Interest Rate Fixing/Libor, Tax Evasion, Money
Laundering, Mis-selling of Investment, Securities Fraud, Sale of
Derivative with no Real Economic Basis, Self Dealing, Conflict of
Interest, Management Compensation.
• Greed prevailed over transparency.
• Compromised checks and balance.
• A Governance model favoring short term profit & focus mainly
on interest of particular stakeholder, over the interest of the
General Public.
3
The New York Times - MARCH 14, 2014
F.D.I.C. Sues 16 Big Banks Over Libor Rigging
The Federal Deposit Insurance Corporation has sued 16 big
banks that set a crucial global interest rate, accusing them of
fraud and conspiring to keep the rate low to enrich
themselves.
The banks, which include Bank of America, Citigroup and
JPMorgan Chase in the United States, are among the world’s
largest.
4
Global Crisis
• Need for a Reliable, Predictable, Proper, Fair, Sustainable
and Profitable CG model
• Targets Durable Revenues
• Need to Follow International Best Practices
• Banking Sector and Global Payment System  Comply
with Global Rules
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Global Crisis
Modern Corporate Governance (MCG): A set of relationship
between a Company’s management, board and shareholders
to ensure that business is done competently, with integrity,
in accordance with applicable laws and with due regard to
the interests of all its stakeholders / those who are affected
by its performance.”
Consumers/Clients/Depositors
Staff
Government: Tax Authority
6
Element of MCG according to Basel
Committee on Bank Supervision- Oct 2010 :
Tone from the Top
A Demonstrated Corporate Values and Code of Conduct
Board Responsibility
Includes :
Articulates Acceptable and Unacceptable Behavior and
Business Practices
A Written Document Tested, Audited and
Enforced
Part of Banks Rule Book and Operational
Procedures
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BDL Circular No 106 Article 2
All banks operating in Lebanon must:
1- Comply with the principles of Basel Committee for Enhancing Corporate
Governance in Banking Institutions.
2- Prepare their own “Corporate Governance Guide” that includes:
- Governance organizational chart
- Governance Implementation Approach
- Board of Directors’ size, role, responsibility and composition
(number of independent, executive and non-executive members)
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BDL Circular No 106 Article 2
1. Work charter of each of the Board committees
2. Rules to assess performance of Senior Management and Board
of Directors on their compliance with Good Governance
3. Criteria on compensation of the Board and Senior Management
4. Succession Plan for Board of Directors and Senior
Management’s members
5. The Disclosure policy adopted for preparing financial
statements
6. A Code of Conduct
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Coverage of Code of Conduct:
• Transparency: Accounting and products component
( Fair, complete, accurate and not misleading )
• Recruitment and appointment: Fair and based on objective criteria
• Safety of Work Place
• Free of Violence and Harassment
• Anti Corruption
• Environmental / Social Responsibility
• Conflict of Interest / Self Dealing
• Anti Tax Evasion /Tax Equality
• Gift & Donations
• Fair Competition
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Necessity to follow International Standard
Modern Corporate Governance and Ethics are Corner Stone
International :
International Association /
Joint Ventures
Cross Border Business
The Audi IFC Experience
Local:
Key to Consumer Protection
Market Stability and Prosperity
Easing Transfers from Family
Owned Corporations
Right Influence over Public Sector
Behavior
Modern Corporate Governance = Democratic State
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CORRUPTION PERCEPTIONS
INDEX 2013.
Lebanon
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We need Governance
as much as we need Ethics
State
Modern
Governance
Ethics
Corporate
That’s is where the Modern World is
That’s where we should progress at Private Sector and
Public Sector Levels to Pass the Public Confidence Test
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THANK YOU