It should be clear to employees how their work aligns with the purpose and strategy and how they contribute to the overall success of the firm. Finally, within the employee category, the remedies need to cover the entire employment cycle, from recruitment and onboarding to performance management, compensation and promotion. I have already spoken about the importance of hiring practices, so I don’t need to repeat myself here. It goes without saying that to be successful in strengthening hiring practices, you need to incorporate a process where you assess whether candidates are a strong fit with the desired culture of the organization and develop indoctrination programs whereby new employees are educated on strategy and vision, as well as the behaviors that are not tolerated. The goal is to convince all employees of three points. First, good behavior protects them as well as the firm. Second, all employees share the consequences of poor conduct. Third, it is therefore the responsibility of each employee root out bad behavior. The industry also needs to consider a mechanism to stop movement of “bad apples” from firm to firm. The current situation not only facilitates movement, but in many cases rewards it. By allowing employees to jump from firm to firm, the impact of unethical behavior is systemic and cannot be contained within one firm or a small section of the industry. We must address this challenge.
Speeches 29 Jun 2022  Opening Keynote Speech at ASIFMA Compliance Asia Conference 2022 : Building the right talent pool for Hong Kong Arthur Yuen, Deputy Chief Executive, Hong Kong Monetary Authority Ladies and gentlemen, Good Morning to all of you, 1. Let me start off by thanking ASIFMA for inviting me to this Compliance Asia Conference. With the COVID situation finally settling down, it’s the right time to re-direct some of our fire-fighting energy back to more forward looking topics. And I think revisiting some of the issues about talent pool for the financial industry is indeed a good starting point. 2. For many of us, the Global Financial Crisis of 2008 is already a distant memory. Most of us may have forgotten the main factors leading to such a painful experience. Just to name a few issues contributing to the crisis: risk takers were not facing the consequences of taking undue and excessive risks; and no proper mechanisms were in place for shaping or influencing the behaviour of financial practitioners. As a banking supervisor, the HKMA cannot afford to forget those lessons. Instead, we have been working hard, even throughout the pandemic in the past two and a half years, to close those gaps. More recently, the HKMA has made good progress in cultivating sound bank culture and preventing “bad apples” from rolling among financial institutions. I would like to take this opportunity today to share with the audience our latest developments on those fronts.