Issues around misaligned incentives and an over-emphasis on short term performance which encouraged reckless risk-taking, in addition to the lack of transparency, and the pervasive conflict of interests have long been the focus of public attention especially in relation to companies with dispersed shareholding structures. These same issues however, are far more serious when they involve the financial institutions given the significant externalities inflicted on society following the failure of such financial institutions. Banks in particular are especially vulnerable to the consequences of governance failures given the critical importance of public confidence to their very survival. Since the crisis, substantial work on several fronts have been devoted to strengthening the resilience of financial institutions. New capital and liquidity standards have been a key focus of the global regulatory reforms and the work to transpose these global standards into national regulations are now well underway in many countries, including in Malaysia. While this will deliver significantly improved frameworks for risk-taking by financial institutions, they remain, at best, poor substitutes for good governance. Evidence of this can be drawn from the contrast between institutions that operated under the same regulatory framework, but that experienced very different outcomes during and after the crisis. The comparisons are revealing. Of significance has been the observation – including in the most recent cases of massive bank losses – that behaviour and culture had a more significant part in the recent governance failures.

Adnan Zaylani Mohamad Zahid: Ethics & professionalism - leaders as role models for the next generation of Islamic finance professionals Speech by Mr Adnan Zaylani Mohamad Zahid, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Chartered Institute of Islamic Finance Professionals (CIIF) 4th Anniversary Dinner and Conferment Ceremony, Kuala Lumpur, 6 November 2019. * * * I wish to extend my sincerest thanks to the Chartered Institute of Islamic Finance Professionals (CIIF) for inviting me here this evening to join the celebrations for the 4th anniversary of the Institute as well as the conferment ceremony of the Chartered Professional in Islamic Finance (CPIF) professional designation. I understand that this evening will also see the conferment of the first ever Fellows from amongst the existing Chartered members of the Institute, all of whom have served the Islamic finance industry with distinction over the years. The Institute’s efforts to support the professionalisation of the Islamic financial services industry is part of a long journey that we embarked on some time ago, forming a key step towards achieving a vision of an industry that is rich with talent. Developing talent development together as an industry Recognising that talent development is a long-term endeavour, Bank Negara Malaysia had set out the initial plan in the Financial Sector Blueprint 2011–2020 in which several affiliate institutions had been identified as having crucial roles to play in the development of talent for financial services industry as a whole.