KUALA LUMPUR: The role played by the boards of financial institutions and who should be held accountable in the event of a financial downfall saw two schools of thought yesterday.
Switzerland-based International Institute for Management Development (IMD) business school academician Professor Didier Cossin charged that at least 90 per cent of the boards are failing in their roles and appear to not displaying any commitment to the companies they sit on.
"We are talking about boards of companies with a market capitalisation of US$200 billion (RM636 billion) that are failing in a blatant and shameless manner," he said during a "Boardroom Confidential" session that focused on "Financial Leaders on the Future of Finance".
Cossin, who is a director of IMD's Global Board Centre, said boards of financial institutions should be paying more attention to the "incompetency of its boards members" and stressed on the need for integrity to play a major role.
His sentiments, however, were not shared by other panel members, who said the quality of board members had improved and that commitment levels were high.
"The boards of Western banks put a lot of hard work into learning the lessons of the past crises and not many members are now members of old boys' clubs," said Aberdeen Asset Management Asia managing director for Singapore, Hugh Young.
CLSA chairman and chief executive officer Jonathan Sloane said the role in determining the success of a financial body lies with its chief executive officer and not the board.
"The board should not be taking the rap because first, there is the CEO, then the auditor, followed by the audit committee who are accountable," he told Business Times.
CLSA is Asia's leading and longest-running independent brokerage and investment group.
When investors began questioning why something is going wrong, the question to be asked is why the CEO is still around," Sloane added, saying that diversity - such as age and gender - should be a consideration for the composition of a board.
In highlighting one of the paradoxes on the future of finance, Sloane said the issue of borderless capital flows need to be understood by regulators who operate within national boundaries.