The operational environment will be different. The business model will require remodelling. Board members are therefore expected to familiarise themselves with the economic, financial and social environment of foreign markets if they are to be effective and successful. BIS central bankers’ speeches  1  Along with higher expectations, there has also been a noticeable increase in the absolute demand for financial institution directors in Malaysia. Since a decade ago, the number of directors in the Malaysian financial sector has increased significantly. This can be attributed to several factors. One reason is the increase in the number of financial institutions arising from the establishment of new Islamic banking and takaful entities within existing banking and insurance groups. Besides that, financial institutions have also progressively strengthened the composition of their boards. This was largely driven by the need to bring more diverse perspectives and skills to the board to meet the growing demands placed on it, and to better prepare for board succession. In the process, we also saw independent directors forming a majority on boards of more financial institutions, including some of the largest domestic financial institutions in the country. It is important to emphasise that this growing demand has not been just about numbers; it is more importantly about the quality of talent that boards must have to perform their role effectively.
Muhammad bin Ibrahim: Of directors and supply of talent Remarks by Mr Muhammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Launch of FIDE Forum Directors Register “Of Directors and Supply of Talent”, Kuala Lumpur, 1 April 2016. *  *  *  Today marks an important step forward for board talent management among financial institutions in Malaysia. The Directors Register will be launched this morning to address the financial sector’s need for a reliable supply of qualified individuals to meet the growing demand for high-calibre directors. Financial institutions play a critical role in the economy, intermediating funds to support the real economy. Because of the criticality of the role, financial institutions must be led by directors who possess the necessary skills, experience and integrity to spearhead financial institutions in a competent and effective manner. Identifying, developing and retaining directors of high calibre are no easy task. We need to design a solution to achieve it. The Directors Register is therefore a timely initiative as this acts as a solution to expand the pool of potential directors for boards of financial institutions. Demand imperatives Being a director of a financial institution is highly demanding. The last financial crisis has shown the failure of board oversight in managing the affairs of financial institutions. Unbridled risks-taking, misaligned, incentives structures and failures in overall governance were just a few of the shortcomings that almost brought the global financial system to a standstill.