But an equilibrium can be realised through careful design, taking into consideration an institution’s internal structures and behavioural norms. Needless to say, the accepted behaviour and values promoted and demonstrated by the senior leadership will influence the business culture and values throughout the organisation. Talking about cultures and values, we should also be mindful about the need to educate and instil into the new generation of bankers the importance of integrity, ethics and professionalism. For this reason, industry training institutes like the recently established Asian Institute of Chartered Bankers play a vital role in cultivating higher standards of governance, ethics and professionalism in the financial sector. The importance of the contributions by these institutions cannot be underestimated. After all, graduates starting off their careers in the financial sector will be the leaders and captains of the industry in years to come. Good governance ultimately depends on the existence of strong and competent boards and a pool of professional senior management. To remain effective, boards are often confronted with the challenge of achieving an optimal balance between the need for continuity and the need for fresh perspective. This brings into question the issue of board composition and membership, and how talent on boards should be continuously renewed. Because financial institutions are complex creatures, longer-serving individual directors can bring a depth of knowledge and experience into the business of the financial institutions, which would consequently strengthen the ability of the board to provide effective oversight. Such continuity also encourages a cohesive board.
Muhammad bin Ibrahim: The challenges of corporate governance in the financial services sector Keynote address by Mr Muhammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the University Malaya’s (in collaboration with the Asian Institute of Chartered Bankers and the International Centre for Education in Islamic Finance) Workshop on “The Challenges of Corporate Governance in the Financial Services Sector”, Kuala Lumpur, 6 August 2014. *  *  *  It is my pleasure to be at this workshop on the theme of “Challenges of Corporate Governance in the Financial Sector”. I would like to congratulate the University of Malaya, the Asian Institute of Chartered Bankers and the International Centre for Education in Islamic Finance for the joint effort to organise this event. I am also encouraged to see speakers from the world of academia, the financial industry and the public sector congregate to offer different perspectives on this important topic. My remarks today will touch on recent issues relating to corporate governance standards with particular emphasis on the financial sector. The growing emphasis on good governance The motivation for strengthening corporate governance in the financial sector is well-established. Unlike other industries, the financial sector plays an important intermediary role that relies heavily on public trust and confidence. Being highly visible entities, any lapse or failure in the governance of financial institutions, whether real or perceived, would attract adverse public reaction and could severely affect their reputation and public confidence.